Can someone please help me answer this question.

Consider an American call. 50 : 40, X : 45, 0' : 30% per year, eMl : 1.05 per year, T : 4 months : % year. The stock will pay no dividends over the four month life of the option. The changes in the stock's price can be approximated by a series of up and down movements and let there be 5 such movements over the 4 month life of the option; i.e., divide the four months into 5 periods. Let n : 5. The length of each interval is then T : $ : 115 year. Now we need a 'u. and a d: the best place to get them is from a. /1,m2 Letu=eozel T5 l,andd:l. It. (a) [5 points] Assuming a totally at riskless term structure, what is the gross return on a riskless security over each of the intervals of length i of a year? (b) [10 points] For each possible stock price and remaining time to maturity (i.e., at each node in the tree of stock prices), calculate A and B (i.e., the components of the replicating portfolio) and the value of the call. (c) [10 points] Suppose the stock rst declines in value and then increases during each of the remaining four periods. Use a table to show at each node the value of your stock and bond portfolio both before and after any trading in stock and borrowing/ repayment of debt. Show explicitly how your stock purchases are nanced by additional borrowing and how the proceeds of any stock sales are used to repay borrowing