Price both a european and american call, Financial Management

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Price both a european and american call

A stock pays $5 dividend one period from now. Build a two-period non-recombining binomial tree with the following parameters: Stock price=40, u=1.15, d=0.9, risk free rate=3%. a) Price both a European and American call option. Explain the difference, if any.

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Financial Management: Price both a european and american call

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