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Problem 4 Consider the following binomial tree for a stock (price). Assume the risk-free rate r= 0 . There is no dividend. 72 60 48

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Problem 4 Consider the following binomial tree for a stock (price). Assume the risk-free rate r= 0 . There is no dividend. 72 60 48 50 40 32 t=0 t=1 t-2 Cor an Amarican pats tie where the strike price K = 55 and Sr is the stock price at time t. Your payoff will be an arbitrarily large negative number if you exercise when K

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