Exercise 2.2. For the American Call with the parameters So = 100, E = 95, r = 0.05, expiration in 3 years, use the tree model with At = 1, u = 1.2, d = 0.8. Calculate the option price. At every node also calculate the payoff from the early exercise and confirm that it is less than the recursively calculated option value. Consider the price path: Up, Down, Down and describe hedging procedure for a long call and its results. Exercise 2.2. For the American Call with the parameters So = 100, E = 95, r = 0.05, expiration in 3 years, use the tree model with At = 1, u = 1.2, d = 0.8. Calculate the option price. At every node also calculate the payoff from the early exercise and confirm that it is less than the recursively calculated option value. Consider the price path: Up, Down, Down and describe hedging procedure for a long call and its results