Question: u = 1.10, d = 0.95, r = 0.02, strike price (X) = 14, S 0 = 12, dividend = 2 USD (paid at time

u = 1.10, d = 0.95, r = 0.02, strike price (X) = 14, S0 = 12, dividend = 2 USD (paid at time 1).

Compute the prices of a European call option and an American call option using a 2 - step binomial tree.

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