A stock price is currently $50. Over each of the next two three-month periods, it is expected to go down by 12% or up by 13%. risk-free interest rate is 6% per annum with continuous compounding.

1)Use a two-step binomial tree model in the no-arbitrage argument valuation approach to calculate the value of a six-month European call option with a strike price of $52

2) using no calculations, show the value of a six-month American call option with a strike price of 52. Explain how your answer