Question: Question 3 The spot rate is currently TL 3 2 / $ . Over the next 3 - month it is expected to go up

Question 3
The spot rate is currently TL32/$. Over the next 3-month it is expected to go up by 10% or
down by 8%. The risk-free TL interest rate is 40% per annum quarterly compounding. 3-month
futures exchange rate is TL34.68/$. With respect to the binomial pricing approach;
a. What is the value of a 3-month European call option with a strike price of TL33 per $?
b. What is the value of a 3-month European put option with a strike price of TL33 per $?
Question 3 The spot rate is currently TL32/$. Over the next

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