Part III: Option Pricing Consider a stock with current stock price of $20 and a call option on the stock with strike price of $21 and 50 days to expire (T=50/365). The following information is also available: - The stock is not paying any dividend (=0) - The expected annual rate of return (continuously compounding) on the stock is 20% ( = 20% ) and its volatility is 50%(=50%). - Annual continuously compounding risk-free interest rate is 5%(r=5%) a. Use n=1,5,10,25,50, or 100 (correspondingly, h=50/365,10/365,5/365,2/365,1/365, or 0.5/365 ) in binomial option model to calculate the option value. Take the risk-neutral pricing approach instead of constructing the complete binomial trees. b. Use the Black-Scholes formula to calculate the option value