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= 1. Consider the two-period binomial model with a non-dividend paying stock S, where So = 4, u = 2, d = 0.5, r =

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= 1. Consider the two-period binomial model with a non-dividend paying stock S, where So = 4, u = 2, d = 0.5, r = = 0.25. Your boss has asked you to price an MaxCall (Lookback) option which expires at time N = 2 and has strike K = 4. The payoff of the MaxCall option at N is = max N max S; 0

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