Financial economics

Suppose the S&R price moves according to a binomial model with n = 1, and T = 0.5. You are given: S = 1000, r = 6%, 8 = 4%, o = 0.3. Tom replicates the payoff of a 1000-strike call option on S&R with a portfolio consisting of A units of the index and B amount of cash invested in bonds. Dan replicates the payoff of a 1000-strike call on S&R futures with a portfolio consisting of Apunits of futures contract to buy the index and Bp amount of cash invested in bonds. Derive an equation that gives Ap in terms of A. (10 points) Suppose the S&R price moves according to a binomial model with n = 1, and T = 0.5. You are given: S = 1000, r = 6%, 8 = 4%, o = 0.3. Tom replicates the payoff of a 1000-strike call option on S&R with a portfolio consisting of A units of the index and B amount of cash invested in bonds. Dan replicates the payoff of a 1000-strike call on S&R futures with a portfolio consisting of Apunits of futures contract to buy the index and Bp amount of cash invested in bonds. Derive an equation that gives Ap in terms of A. (10 points)