6. A stock price is currently 50. During each two-month period for the next four months it is expected to increase by 10% or reduce by 10%. The risk-free interest rate is 5%. Use a two-step tree to calculate the value of a derivative that pays off (Max(120-ST)2) where ST is the stock price in four months? If the derivative is American-style, should it be exercised carly? Shon Answer (15 Points)