Travis Travels LLC has recruited you as their fresh derivatives pricing analyst. As part of your first task, the CFO James Cooper provides you the following information:

Stock price	$45
Volatility	15%
Risk free rate	10% per annum
Exercise price	$66
Term to maturity	6 months

(a) Using Black Scholes Option Pricing Model, determine the price of a European call option. Clearly show all your workings.

(b) Using the put-call parity model, estimate the price of the put option.

(c) Explain how an American call premium is valued compared to a European call premium under a 2 time-step Binomial Option Pricing Model.