For HEKTAŞ, You are going to design 2 3-step Binomial Trees, one for Call options, and one tree for the Put options. You are going to find the prices of both European and American Call by using the Call tree, and the prices of both European and American Puts by using the Put tree. Assume that the option maturity is a 1-year. (so each time interval between nodes will be worth 4 months) Assume that in the beginning the option is at the money. Estimate the annual volatility from the price data in order to be able to compute the up and down movements. ( draw by hand )
