Question: 6. Does Black-Scholes option pricing formula still work for pricing futures option? If not, why doesn't it work? How to solve the option pricing

6. Does Black-Scholes option pricing formula still work for pricing futures option?

6. Does Black-Scholes option pricing formula still work for pricing futures option? If not, why doesn't it work? How to solve the option pricing problem allowing negative underlying price? (Hint: exchange employed Bachelier model, please explain this model.) (2 marks)

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