# Question: Repeat Problem 14 3 except construct a three period binomial tree Assume

Repeat Problem 14.3, except construct a three-period binomial tree. Assume that Asian options are based on averaging the prices every 4 months.

a. What are the possible geometric and arithmetic averages after 1 year?

b. What is the price of an Asian arithmetic average price call?

c. What is the price of an Asian geometric average price call?

a. What are the possible geometric and arithmetic averages after 1 year?

b. What is the price of an Asian arithmetic average price call?

c. What is the price of an Asian geometric average price call?

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