Question: Construct a 180-step binomial. Practice being fast. 6. Be brave here. Add one more input into your binomial called American which can take on a
Construct a 180-step binomial. Practice being fast. 6. Be brave here. Add one more input into your binomial called American which can take on a value A or E for American or European, respectively. Add an IF statement to call and put values at every node in the interior of your binomial tree (but not the last time layer) to enable your model to value American options. The purpose of the IF statement is to compare the discounted probability-weighted average of the payoffs from the subsequent nodes (the value we compute for a European option) to the immediate exercise value which is equal to the current stock price (at that node) minus the strike price for calls, and the strike price minus the current stock price for puts. If the latter is greater, overwrite the former with the latter. Don't give up, keep thinking how to do it. If you understand my instruction here, then you are ready for the test
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