help!!

1. Consider the three-period binomial model with a non-dividend paying stock S, where S0=2,u=2,d=0.5,r=0.25. Your boss has asked you to price a European straddle 2 option which expires at time N=3 and has strike K=1. The payoff of the straddle option at N is VN(Straddle2,Euro):=(SNK)2 - Compute the pair (V0(Straddk2,Euro),0).(40pts) - Now, compute the American Straddle price V0(Straddlo2,USA), with payoff G(S)=(SK)2.(50pts) - Finally, compute the value of a financial instrument that pays 1 the first time the stock reaches 4 . If the stock never hits 4 , the financial instrument expires worthless. (10 pts) HINT: Make sure to take at least three decimal points for all entries in your stock and option evolution entries in a table or binomial tree