Consider an American contract V that pays off in a two-step binomial model with parameters (a) Find.

Consider an American contract V that pays off in a
two-step binomial model with parameters

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(a) Find the price V$(n) for n = 0, 1, 2. Determine the
optimal stopping strategy τ ∗.

(b) Find the hedging portfolio.

(c) What is the price and an optimal stopping strategy
for an American contract that pays off min

(5$τ , Sτ)?