2. Consider a binomial tree with So = 16,u = 1.25, d = 0.75, and 3 periods (so a total of 8 scenarios). Interest rate is r = 0.1. We are interested in an Asian-type option that pays (Y3 - S3)+ at T = 3, where Y3 = Si + S2 + S3. Thus, to determine the payoff we compare the average asset price S,+9+S3 to the terminal stock price S3 and collect the difference. Determine the no-arbitrage price of this contingent claim today: Vo. Also determine the replicating portfolios for each time step t = 0, 1, 2 along the scenario w= THT. 2. Consider a binomial tree with So = 16,u = 1.25, d = 0.75, and 3 periods (so a total of 8 scenarios). Interest rate is r = 0.1. We are interested in an Asian-type option that pays (Y3 - S3)+ at T = 3, where Y3 = Si + S2 + S3. Thus, to determine the payoff we compare the average asset price S,+9+S3 to the terminal stock price S3 and collect the difference. Determine the no-arbitrage price of this contingent claim today: Vo. Also determine the replicating portfolios for each time step t = 0, 1, 2 along the scenario w= THT