Question: ( 4 ) ( 2 0 points ) Let N = 3 . ( a ) Use the backward algorithm to find the time -

(4)(20 points) Let N =3.
(a) Use the backward algorithm to find the time-zero value of a European call with strike price 4.
(b) Use the backward algorithm to find the time-zero value of an American call with strike price 4. What is the time-zero optimal strategy?

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