Question1:Consider a stock with spot price of $200 that can increase or decrease by 10% each...

Question1:Consider a stock with spot price of $200 that can increase or decrease by 10% each month. Find the price of 2-month European call option with strike price of $190. The stock does not pay any dividends. The risk-free interest rate is 8%

Question2:Consider 2-year futures contract on a stock. Today’s futures price is $200 and next year it can increase by 20% or decrease by 30%. Find the price of 1-year European call futures options with strike price of $190 on this futures contract. The stock does not pay any dividends. The risk-free interest rate is 8%

Question3:Today’s exchange rate is 1.5$/£ and next year it can either go up to 1.6$/£ or down to 1.4$/£. Find the price of 1-year European call option on £1000 with strike price of 1.45$/£ if S.S. interest rate is 8% and U.K. interest rate is 3%

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Expert Solution

Please ask remaining parts seperately

jeff jeffy answered 1 year ago

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