Exercise 7 A stock price is currently $50. Over each of the next two 3-month periods it is expected to go up by 6% or down by 5%. The risk-free interest rate is 5% per year with continuous compounding, what is the value of a 6-month European call option with strike price of $51? Complete the entire binomial tree diagram for the 2 periods. Place the price of the stock and the price of the call at each node on the binomial tree diagram Exercise 8 Refer to exercise 7. What is the value of a 6-month European put option with strike price of $51? Complete the entire binomial tree diagram for the 2 periods. Place the price of the stock and the price of the put at each node on the tree diagram. Verify that the European call and the European put prices satisfy the put-call parity Exercise 9 Refer to exercise 8. If the put option were American, would it ever be optimal to exercise it early at any of the nodes on the binomial tree diagram? Find the value of this American put option