he short riskless interest rate is 7% per period. The two-period corn futures price is $165 today and the size of an upward move is 27 %. Consider a European futures call option with an exercise price of $ 185 maturing two periods from now.

1. What are futures prices in the tree?
2. What are the call payoffs at maturity?
3. What is the price of the futures call option at each node in the tree?
4. Calculate the present value of the call option

Repeat the process assuming the option is a put option.