Construct a binomial tree for values {N, S0, u, d, rf , X}, where N = 4 for the stock price and for the derived call option.

Be sure to highlight the stock prices as a function of the parameters, and the final call values.

Show all the subtrees you should calculate (DO NOT try to solve them, only highlight which one

are they), and explain why you have less than 15 subtrees to calculate.

(Lecture: The final period is T=2, consider the following S0=$100, u=1.2, d=0.9, rf=0.05, our goal is to price a put option with strike price X=$110, and expiration date TThe final period is T = 2

bla Consider the following S0=$100 u=1.1 d=0.8 rf=0.05. Our goal is to price a call option with strike price X = $110, and expiration date T).