To price a derivative, we can use risk-neutral pricing. As an alternative yet equivalent method, we can construct price the derivative using replicating strategies. Consider a 1-period binomial model, where we have three nodes No,o, N1,o, N1,1. We have a cash account with fixed interest rate r = 0.01 - that is, if we have at No.o cash account with D dollars, we expect (1 + r) D at either N1,0 or N1,1. We also have a stock with price So,o = 10 at No,o, $1,o = 8 at N1,0 and $1,1 = 15 at N1,1. Now consider an European call option at time t = 1 with strike K = 12. Can you price the option at No,o using a replicating strategy, and what is the price