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Consider a one-period binomial model with h=1, where S=$100,r=0,=30%, and =0.08. Compute American call option prices for K=$70,$80,$90, and $100. (a) At which strike(s) does

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Consider a one-period binomial model with h=1, where S=$100,r=0,=30%, and =0.08. Compute American call option prices for K=$70,$80,$90, and $100. (a) At which strike(s) does early exercise occur? (b) Use put-call parity to explain why early exercise does not occur at the higher strikes. (c) Use put-call parity to explain why early exercise is sure to occur for all lower strikes than that in your answer to (a)

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