(1 pt) Let So 86.5 stock price at t 0 K 90 strike price for call option r, 0.01 75 risk-free interest rate ? 0.21 volatility T 0.166667 expiration time (years) An American put option on the stock will expire att T Approximate the value of the American put option by using the binomial tree method with M 2 time subintervals of duration At- The discount factor for each subinterval is e-A Improve the approximation to the American option by correcting for tree errors, assuming that the net effect of the tree errors is the same for the American and European options Between time t iAt and ti+1, a value S will increase to SH = uS with probability p, or decrease to Si+1dS with probablity 1 - p where 2 years VA0.941176 p (e d)/(u - d)-0.496884 The binomial tree of asset values is The binomial tree of American put option values is