Lets assume you have an American call option expiring in 2-years with exercise price of $55 on a stock which currently trades at $75. You expect the stock to increase by a factor of 1.15 and decrease by a factor of 0.75. If the interest rate is 4%, determine the option value and explain the options moneyness and elaborate on why the Binomial Option pricing model is used to price options? Show all your calculations. Total Marks of Q2: 20