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Consider the single-period binomial model with parameters: 1 U = d = 1.1, R= 1.05, S = $100, 8= 0, and an American call with strike $95. (a). What is the arbitrage-free price of the American call? (b). Compute the American call price and optimal exercise time if the stock pays out dividends, where 0 = 1.1 (gross dividend over the period). Consider the single-period binomial model with parameters: 1 U = d = 1.1, R= 1.05, S = $100, 8= 0, and an American call with strike $95. (a). What is the arbitrage-free price of the American call? (b). Compute the American call price and optimal exercise time if the stock pays out dividends, where 0 = 1.1 (gross dividend over the period)