#4: Binomial Option Pricing Model 1. Using Excel, show the step-by-step process of calculating a call option premium of f = 0.633 (Textbook, p 270) in detail. In doing so, with a timeline (or two dates), be specific about a covered call portfolio, riskless portfolio (or hedge portfolio), and arbitrage condition. 2. Now, assume the exercise price (strike price) is $20, not $21. But other data are the same as in part 1). Using Excel, show the step-by-step process of calculating a new call option premium with the exercise price of $20 in detail with a timeline (or two dates). 3. Discuss the difference in premium in part 1) and part 2)