c) Using a two-step binomial tree and continuous discounting, value an American put option with a strike price of 32 and one year to expiry, written on a stock that is currently trading at 30. The annual risk-free rate is 5%, u (the upward factor) is 1.5. Show all your workings with commentary on steps. If a generalised formula is used for the value of the option at any node, you must derive the formula/comment on its derivation clearly. A correct final answer with correct but underived formulae can earn a maximum of 4 marks. Only a correct final answer without intermediate steps can earn a maximum of 2 marks. c) Using a two-step binomial tree and continuous discounting, value an American put option with a strike price of 32 and one year to expiry, written on a stock that is currently trading at 30. The annual risk-free rate is 5%, u (the upward factor) is 1.5. Show all your workings with commentary on steps. If a generalised formula is used for the value of the option at any node, you must derive the formula/comment on its derivation clearly. A correct final answer with correct but underived formulae can earn a maximum of 4 marks. Only a correct final answer without intermediate steps can earn a maximum of 2 marks