Data analytic

    Assume a 2 step tree to value a European option that is due in 4 months when the futures price is 85, strike price is 80, risk-free rate is 1.5% and 𝜎 = 0.30. Draw out the binomial tree to include the futures price at every node and the call/put option values at the ending node. Compute the initial premiums for a call and a put option. (Show your work) Repeat the binomial tree (as done in part (a-b)) for an American put and call option.Do any of the premium values change? If so, which one(s)? Compute the initial premium for the American options