16. Suppose S = \($100\), K = \($95\), r = 8% (continuously compounded), t = 1, σ = 30%, and δ = 5%. Explicitly construct an eight-period binomial tree using the Cox-Ross-

Rubinstein expressions for u and d:

u = eσ

√

h d = e

−σ

√

h Compute the prices of European and American calls and puts.