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= = (40 points) Suppose So 4, u = 2, d = { and r = 1. Let N = 2. Consider an American put
= = (40 points) Suppose So 4, u = 2, d = { and r = 1. Let N = 2. Consider an American put option with strike price K 5. Use the backward algorithm in Theorem 4.4.3 to evaluate V., V1, V2. (Compare your findings with the results on Pages 102-103.) = = (40 points) Suppose So 4, u = 2, d = { and r = 1. Let N = 2. Consider an American put option with strike price K 5. Use the backward algorithm in Theorem 4.4.3 to evaluate V., V1, V2. (Compare your findings with the results on Pages 102-103.)
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