(a) Price the call option of Problem 7 under the assumption that the volatility increases by 10 % each week.

(b) Same question under the assumption the volatility decreases by 10 % each week.

Data in Problem 7

Use a 4-step binomial tree to price a call option with these particulars: S₀ = 36, K = 34, r = 0.02, σ = 0.3, T = 4 weeks (28 days).