Question: Question 1: Consider a two-period binomial model on an American call option. The stock price is currently $64. U = 1.3. D = 0.85. The

Question 1: Consider a two-period binomial model on an American call option. The stock price is currently $64. U = 1.3. D = 0.85. The risk-free rate is 4.2% The exercise price is $60. The stock pays an 8% dividend in time 1. Price the American call option.

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