Consider a CRR model with \ \ =\ 2\ ,\ \ 0\ =\ $\ 100\ ,\ \ 1\ =\ $\ 200\ or \ \ 1\ =\ $\ 50\ ,\ and an associated European call option with strike price \ \ =\ $\ 80\ and\ exercise time \ \ =\ 2\ . Assume that the risk free interest rate is \ \ =\ 0.1\ .\ \ (a) Draw the binary tree and compute the arbitrage free initial price\ of the European call option at time zero.\ \ (b) Determine an explicit hedging strategy for this option.\ \ (c) Suppose that the option in (a) is initially priced \ $\ 2\ below the arbitrage\ free price. Describe a strategy (for trading in stock, bond\ and the option) that is an arbitrage.