1. Calculate the American call price using the two-period binomial model. The current stock price is 55 and the exercise price is 50. The option expires in 14 days and volatility is 55%. Would the European call have a different price? If so, would it be higher or lower? (You do not have to draw the stock price path and the call price path but clearly show the answer for each part) Round to 4 decimals

The adjusted risk-free rate is .0025

u = 1.111 d = .9001 and show how to create a riskless portfolio, proves that it is riskless after 1 period. Round to 4 decimals for smaller numbers