Q1. (a) As an analyst in a brokerage firm, you are required to provide investment advice on JWC corp. call option. Current price for JWC corp. stock is $25 and the risk-free interest rate is 5% (continuously compounded). The rate of capital gain on JWC corp. stock price per period is 25%; The rate of capital loss on JWC corp. stock price per period is 14%; Based on the information given above: i. Determine the values of a European call on JWC corp. stock with strike price $23 at various nodes for a two-period binomial tree model (each period is three-month). (13 marks) ii. Suppose the call in part (i) is an American option, calculate the value of call. (7 marks) Q1. (a) As an analyst in a brokerage firm, you are required to provide investment advice on JWC corp. call option. Current price for JWC corp. stock is $25 and the risk-free interest rate is 5% (continuously compounded). The rate of capital gain on JWC corp. stock price per period is 25%; The rate of capital loss on JWC corp. stock price per period is 14%; Based on the information given above: i. Determine the values of a European call on JWC corp. stock with strike price $23 at various nodes for a two-period binomial tree model (each period is three-month). (13 marks) ii. Suppose the call in part (i) is an American option, calculate the value of call. (7 marks)