How is the tree in Figure 35.2 modified if the 1- and 2-year futures prices are 21 and 22 inst

Question

How is the tree in Figure 35.2 modified if the 1- and 2-year futures prices are  21 and  22 inst

Accepted Answer

In Example 35.3, the tree in Figure 35.2 represents the possible price movements of the underlyi

How is the tree in Figure 35.2 modified if the 1- and 2-year futures prices are $$\$ 21$$ and $$\$ 22$$ instead of $$\$ 22$$ and $$\$ 23$$, respectively. How does this affect the value of the American option in Example 35.3.