A stock price is currently $80. It is known that in 4 months it will be either $75 or $85. The risk-free interest rate is 5% per year with continuous compounding. Consider a 4-month European call option with a strike price of $80.
(1) Draw the binomial tree.
(2) Compute ? of the option.
(3) Compute the risk-neutral probability.
(4) Find the current value of the call option.