Question: Use the binomial tree technique to price a one year American call option with strike price $65, written on a $60 stock. Use a two

Use the binomial tree technique to price a one year American call option with strike price $65, written on a $60 stock.

Use a two step tree, with 6 month time steps. Volatility is 18%. The stock will pay a dividend in 7 months time of $4. Interest rates are 7%, with continuous compounding.

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