Problem: Suppose the current price of a non-dividend-paying stock is $90. The risk-free rate is 3% per annum (continuously compounded) for all maturities. During each two-month period for the next four months it is expected that the stock increases by 11% or reduces by 9.5%. Using the Cox-Ross-Rubinstein approach determine the price of the American style derivative whose payoff is given as max[(90 -St,0)]^2. Where St is the stock price.