Suppose = $100 = $95, = 8% (continuously compounded),= 1, = 30%, and = 5%. Explicitly construct an eight-period binomial tree using the lognormal expressions for u and d: Compute the prices of...

Suppose

= $100
= $95,

= 8% (continuously compounded),= 1,

= 30%, and

= 5%. Explicitly construct an eight-period binomial tree using the lognormal expressions for u and d:

Compute the prices of European and American calls and puts.