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A futures price is currently 50.At the end of 6 months it will be either 55 or 45.The risk free interest rate is 6% per

A futures price is currently 50.At the end of 6 months it will be either 55 or 45.The risk free interest rate is 6% per annum.We want to value a 6-month European call option with a strike price of 50.

a)What is the Black-Scholes equation to govern this situation?

What is the value of the option? (Consider using a one-step binomial tree)

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