Let us consider a one-year, one period binomial tree model to price a European call option on a non-dividend paying stock. The current price of the stock is 100. The continuously compounded annual expected return on the stock is 10 %. The continuously compounded risk-free interest rate is 5%. The replicating portfolio of the option consists of 0.4 purchased shares of the stock and an amount of 20 borrowed at the risk-free interest rate. (a) What is the time- 0 price (premium) of this European call option? (b)What is the appropriate discount rate for the call option in the context of real world probability as we discuss in class?