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The current price of a non-dividend paying stock is $50, volatility 20% and the continually compounding risk-free rate 5%. Use a two-step tree with 6-month

The current price of a non-dividend paying stock is $50, volatility 20% and the continually compounding risk-free rate 5%. Use a two-step tree with 6-month steps to value

  1. a)A European put option on the stock with a strike price of $48 that expires in 12 months
  2. b)An American put option with the same strike and expiration.

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