Question 14. Consider binomial model with So = 100, u = 1.2, d = .9 and r = .05. Use a three period (two step) binomial tree to price an Asian call option with strike price K = 100 whose payoff is equal to Payoff = max{S - K,0} where S is the average price the stock obtains. For example, in the up-up state of the world, S = (100 + 120 + 144)/3 = 121.33. That is to say, it is a regular call option except the relevant price isn't the final price but the average price obtained. Here is the stock price tree: 144 120 So = 100 108 90 81