Question: Options can be priced by using either the risk neutral option, pricing approach, which assumes a risk, neutral world, or by the BSM which extends

Options can be priced by using either the risk neutral option, pricing approach, which assumes a risk, neutral world, or by the BSM which extends the results of the risk neutral approach. Futures are also very popular derivatives, use extensively for hedging wrist. In this problem set, you will be using the two option pricing techniques to find the option premium, and show how futures can be used to hedge business and portfolio risk. Practice pricing options using different mythology, and show how future contracts are used to manage risk. Please answer all questions.

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