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3. Suppose S=$50, K=$45, =30%, r=8%, and t=1 year. The stock will pay a $4 dividend in exactly after the first jump in stock price
3. Suppose S=$50, K=$45, =30%, r=8%, and t=1 year. The stock will pay a $4 dividend in exactly after the first jump in stock price (at the end of first period). Compute the price of European and American Call option using a two-step binomial tree. (n=2)
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