Facebook (FB) currently trades at $194.00. You purchase a 16 month European $8.00 strike call option on a short futures contract on one share of FB. The futures delivery date is 29 months from now and the delivery price is $233.00. The risk-free rate is 5.1%. Compute the range of prices of FB 16 months from now that will make you want to exercise your option.

Answer rating: 100% (QA)

the riskfree rate of 51 trade pr... View the full answer