Question: DO NOT COPY AND PASTE ANY ANSWER FROM OTHER CHEGG POSTS Please show all work so I can learn. Thanks! _________________________ An investor is analyzing

DO NOT COPY AND PASTE ANY ANSWER FROM OTHER CHEGG POSTS

Please show all work so I can learn. Thanks!

_________________________

An investor is analyzing the costs of two-year, European options for aluminum and zinc at a particular strike price.

For each ton of aluminum, the two-year forward price is 1400, a call option costs 700, and a put option costs 550.

For each ton of zinc, the two-year forward price is 1600 and a put option costs 550.

The annual effective interest rate is 6%.

Calculate the cost of a call option per ton of zinc.

____________________________

A) 522

B) 800

C) 878

D) 900

E) 1231

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