(a) What is the price of an American-style call option assuming a 4% annual risk-free drift, a strike price = $150, and 3 years to maturity. In each year the price can either rise by a factor of 1.3 or fall by a factor of 0.9. The current price of the underlying asset is $100 and it pays no dividends.
(b) Why is the price in part (a) different than you would get from inputting a 10% drift and 20% volatility into the Black Scholes equation?
(c) What would be the price of an American-style put option on the same stock with the same maturity as in part (a) above?

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