You are to price a 2-year 100-strike arithmetic average price Asian call option on a stock using a binomial tree.

You are given:

i) The length of each period is 1 year.

ii) The current stock price is 100.

iii) The stock does not pay dividends.

iv) u=1.2 and d=0.8.

v) The continuously compounded risk-free interest rate is 5%.

The payoff of the Asian call option is calculated using the last two prices. Calculate the price of the option.

A:11.1 B:11.6 C:12.1 D:12.6 E:13.1

And talk about of the three binomial models(CRR, FT, JRR), which is your favorite and why?