Question 3 Consider a binominal model for a futures contract. You are given: i) Each period is 1 year. ii) The price of a one-year at the money call option on the futures contract is 6.3415. iii) The risk-neutral probability of an up move is ; iv) The initial futures price is 100 v) The continuously compounded risk-free interest rate is 5% Calculate d. (Note: resolve this contract as a call option, treating the initial futures price as the strike and the final futures price as the final price) Possible Answers A 0.5 B 0.6 C 0.7 D 0.8 E 0.9