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As an analyst at Bank of America Merrill Lynch, you are evaluating European call futures option...

As an analyst at Bank of America Merrill Lynch, you are evaluating European call futures option and European put futures options. A futures price is currently $50. It is expected to move either to $55 or down to $45 over the next three month. The risk-free interest rate is 8% per annum with continuous compounding.

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ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

1. CALL OPTION.

2. PUT OPTION.

jeff jeffy answered 2 years ago
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