1. Consider a 3-step Binomial model with d 0.95, u= 1.05, r = = 0.02, So = $60. - a. Compute the price of a European Call option with strike K 60. b. Compute the hedge at each node, i.e., compute the number of shares to be held and amount of money to be borrowed or invested at each node. c. Suppose the stock price first goes up and down twice. On this path, describe how one can implement the replicating portfolio. 1. Consider a 3-step Binomial model with d 0.95, u= 1.05, r = = 0.02, So = $60. - a. Compute the price of a European Call option with strike K 60. b. Compute the hedge at each node, i.e., compute the number of shares to be held and amount of money to be borrowed or invested at each node. c. Suppose the stock price first goes up and down twice. On this path, describe how one can implement the replicating portfolio