Please help me with this question! Any explanation or suggestion would help! Thanks in advance!

1. (a) Find a stock that does not pay a dividend. Estimate the price of a 4 or 5 month call option using binomial pricing and the Cox, Ross and Rubinstein method of nding u and d: u=eaJE _ d =1/u = (ME Assume At = 1/ 12, r = .005 and that the volatility of the stock equals .40 (b) Estimate the price of a 4 or 5 month 1M option using binomial pricing and the Cox, Ross and Rubinstein method of nding u and d. Also, assume At = 1/ 12 and that the volatility of the stock is .40 (c) Compare your results to the actual bid-ask midpoints. Why are they different? Which do you think is the most accurate