1.The price of a stock follows the binomial tree shows in Figure 1 with interest rate r = 0 and dividend rate q = 0. Let X be an American call option with maturity at tick-time 2 and strike price 70. What is the fair price for X?

2.The price of a stock follows the binomial tree shown in Figure 1 and interest rate r = 0. The stock does not pay dividend. What is the price of an Asian (arithmetic) average-stock call option with strike price 60?

3.The price of a stock follows the binomial tree shown in Figure 1. The risk free interest rate is 0.05. The stock pays continuous dividend at the rate = 0.05. What is the price of an Asian (arithmetic) average-strick call option?

The price movement of a stock is given by the following binomial tree. 160) 140) 120 100) 80 60 40 Figure 1: stock price