In the frame work of N-period binomial model with the parameters u, d, r we consider the European Asian call option which expires at N and pays V_N = (SN - A_N)^+, where A_n is the historical average of the stock price up to time n, i.e., A_n = 1/1+n Sigma^n_k = 0 S_k. Define the process X as X_n = A_n/S_n. Let N = 2, u = 2, d = 1/2, r = 1/4, S_0 = 4. Find V_0. In the frame work of N-period binomial model with the parameters u, d, r we consider the European Asian call option which expires at N and pays V_N = (SN - A_N)^+, where A_n is the historical average of the stock price up to time n, i.e., A_n = 1/1+n Sigma^n_k = 0 S_k. Define the process X as X_n = A_n/S_n. Let N = 2, u = 2, d = 1/2, r = 1/4, S_0 = 4. Find V_0