5. Let S=$ 100, K=$95, o=30%, the continuously compounded interest rate is r=8%, T=l year, and n=3 (three-step Binomial tree). (a) Calculate the binomial option price for an American call option. Verify that there is never early exercise; hence, a European call option would have the same price. (b) Calculate binomial option price for a European put option. Verify that put-call parity is satised. (c) Calculate the price of an American put. 6. Let So =$41, K=$40, r=8%, 6=30%, T=1 year, and n=2 (2-step binomial tree). (a) If the continuously compounded expected return on the stock is 15%, nd the real probability that the stock will go up. (b) Price a European call option using real probability. (0) Price a European call option using risk-neutral probability