Consider two 2-year options with a strike price of $52 on a stock whose current price is $50. The exhibits below show the binomial trees used to price the two options. There are two steps of 1 year and in each step the stock either moves up by 20% or moves down by 20%. The risk-free rate is 5%.

Are they put options or call options?

		both calls
		both puts
		Exhibit 3 call; Exhibit 4 put
		Exhibit 4 call; Exhibit 3 put

Question:

Are they American or European?

		both European
		both American
		Exhibit 3 European; Exhibit 4 American
		Exhibit 4 European; Exhibit 3 American

Exhibit 3 72 0 60 1.4147 50 4.1923 48 4 40 9.4636 32 20 Exhibit 4 72 0 60 1.4147 50 5.0894 48 4 40 12.0 32 20