Question: 5. Repeat Problem 3, except construct a three-period binomial tree. Assume that Asian options are based on averaging the prices every 4 months. a. What

5. Repeat Problem 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?

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