For each ton of a certain type of rice commodity, the four-year forward price is 300. A

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For each ton of a certain type of rice commodity, the four-year forward price is 300. A four-year 400-strike European call option costs 110.

The annual risk-free force of interest is a constant 6.5%.

Calculate the cost of a four-year 400-strike European put option for this rice commodity.

(A) 10.00

(B) 32.89

(D) 187.11

(E) 210.00

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Derivative Pricing

ISBN: 9780367734213

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Authors: Ambrose Lo

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Question Posted: Nov 22, 2023 08:16 AM

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For each ton of a certain type of rice commodity, the four-year forward price is 300. A

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