How to do question A?

5. The following tree depicts the price evolution of a stock. Each sub-period is six months and the entire period is therefore 12 months. The annual interest rate (continuous compounding) is 2.9%. $40.32 $38.25 $36.00 $37.80 $34.25 $32.40 A. Use the simple binomial tree method (i.e., form a risk-neutral portfolio to find the optimal combination at each node as we did in class) to find the value of an American put with an exercise price of $40