Question: Consider three trading dates t = 0;1;2 and a commodity with price at time 0 equal to $50. Given the interest rate is 3%, the

Consider three trading dates t = 0;1;2 and a commodity with price at time 0 equal to $50. Given the interest rate is 3%, the strike price is $50 and u = 1:1 and d = 0:97, determine the American call and put option prices through the binomial model.

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