Consider a two-period binomial model. Assume that the maturity is T = 1 and each periodis t = 12 . The stock has an initial price os $100 and can go up 15% (log return) or down10% (log return) per annum with equal probabilities. Assume that the annual continuouscompounding interest rate is r = 0.02. Consider an put-like option with intrinsic value(K St)+ if exercised at time t {0, 1, 2}. This option, however, can only be exercisedat even times. That is, it can only be exercised in periods t {0, 2}, and it cannot beexercised in periods t = 1. Such as option is called a Bermudan option. Assume that thestrike price is K = 95.(a) Draw a binomial tree for this model. Mark the nodes of the tree in which the optioncan be exercised.(b) Use backwards induction to show that the price of the Bermudan option is 1.29.Consider how the Snell envelop has to be adjusted for periods in which the optioncannot be exercised.(c) What is the optimal exercise rule