Question: Considering American put option. Assume the multi-period binomial tree, we are extending figure below beyond 3 periods. Cuintrinsic=R1(qCuu+(1q)Cud) What are the value of Cu ?

Considering American put option. Assume the multi-period binomial tree, we are

Considering American put option. Assume the multi-period binomial tree, we are extending figure below beyond 3 periods. Cuintrinsic=R1(qCuu+(1q)Cud) What are the value of Cu ? a) Cu=max(KuuS,Cuintrinsic) b) Cu=max(KuS,Cuintrinsic) c) Cu=max(uSK,Cuintrinsic) d) Cu=max(uS,KCuintrinsic)

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