Consider the three period (N 3) binomial model with So 4, the "up factor"2, the "down factor" d 1/2 and the risk-free interest rate is r = 1/4. Draw the binomial tree and find the time-zero price andl optimal exercise time for an American style call contract with strike price K 32. This derivative gives the owner the right to purchase the stock for $32 up to the time-3. At time t 3, if they have not already purchased the stock by exercising the contract, they must purchase it for $32 (even if they lose money). Thus the intrinsic value is the same as a call option Gn-Sn K. determine the optimal stopping time. Consider the three period (N 3) binomial model with So 4, the "up factor"2, the "down factor" d 1/2 and the risk-free interest rate is r = 1/4. Draw the binomial tree and find the time-zero price andl optimal exercise time for an American style call contract with strike price K 32. This derivative gives the owner the right to purchase the stock for $32 up to the time-3. At time t 3, if they have not already purchased the stock by exercising the contract, they must purchase it for $32 (even if they lose money). Thus the intrinsic value is the same as a call option Gn-Sn K. determine the optimal stopping time