Build a functional Binomial option pricing tool in Excel or using other applications or programming language. The tool should be able to price European call and put options, as well as American calls and puts. Step 1: Set up the tree Using we discussed in the lecture of Binomial Tree, the method by Cox, Ross and Rubenstein (CRR) are used for calculating p, u and d. Other methods exist (such as the Jarrow-Rudd or Tian models), but the CRR approach is the most popular. Please see the excel demo file for a simple example. You can decide how small your time step is. The pricing is usually more accurate with more steps (smaller delta t, and hence more nodes) Step 2: Calculate delta of the option at each node. Step 3: use the tool you build to compare to the market price of stock options of your choice. You can estimate the return volatility of the underlying asset using historical data (see slide 22 of the lecture on Binomial tree)