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The futures price on a stock index is traded at 50 with a volatility of...

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Accounting

The futures price on a stock index is traded at 50 with a volatility of 20%. The risk free rate is 5% with continuous compounding, and the futures contract mul-tiplier is 100(a) Calculate the price of an American put option on the futures with a strike price of 60 and expiration in 6 months using a two-period binomial model.(b) If the put option in (a) were exercised when the futures price is 55, what would the payoff be to the short position holder?

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