73. Using a 1-period binomial model based on the forward price (a la McDonald),determine the price of an option expiring in 3 months to enter into a futurescontract on the Dow at $8000 if the current prepaid forward on the index hasvalue $7500, the continuous risk-free rate of interest is 8%, and the annual

volatility of the index is 35%.

(A) $320 (B) $420 (C) $520 (D) $620 (E) $720