Consider a binomial world in which the current stock price of $68 can either go up by 18% or down by 10% per period, relative to the initial stock price at the beginning of the period (so, from these percentage changes, you can readily deduce the up- and down-factors for the binomial application). The risk-free rate is 5.5% per period. The stock pays no dividends.

1. A Call option is written on the stock with an exercise price of $70. Assume a two-period world where the option expires at the end of the second period. The call is an American-style option. What is the value of the Call option, based on a 2-period binomial model?
2. What is the correct price for a American-style Put option on this stock, but with a different strike price of $75, based on a ONE-PERIOD binomial option-pricing model? (so, the time to maturity for the Put option is one-half the time to maturity for the above Call option in a. above) . Show how you got your answer.