***This question is from Investment and Financial Mathematics(IFM) course for actuaries. Please give a handwritten solution with all steps shown. I will give a thumbs up for a clear and correct solution. Thanks for your help!***

An American call option on the stock expiring in one year has a strike price 70. Calculate the price of the call option.

Future prices of a stock are modelled with a 12-period binomial trec, cach period being one month. You are given the following information: (i) The tree is constructed based on forward prices. (ii) The stock's initial price is 50 : (iii) The continuously compounded risk free rate is 4%. (iv) The stock pays no dividends. (v) =0.1 Future prices of a stock are modelled with a 12-period binomial trec, cach period being one month. You are given the following information: (i) The tree is constructed based on forward prices. (ii) The stock's initial price is 50 : (iii) The continuously compounded risk free rate is 4%. (iv) The stock pays no dividends. (v) =0.1