2. ( 30 points) Suppose that Microsoft stock will not pay dividends over the next six months. The current Microsoft stock price is $65. Three months from now Microsoft stock price will be either $80 or $60. If the stock price rises to $80 three months from now, then the stock price will be either $100 or $70 six months from now. If the stock price falls to $60 three months from now, then the stock price will be either $70 or $40 six months from now. The continuously compounded risk-free return is 5%. (a) (5 noints) Draw the binomial tree for Microsoft stock price. (b) (15 points) Using the binomial model, estimate the current value of a European call option on Microsoft with an exercise price of $70 that expires six months from now