Describe two problems in using the black option on futures, Ask an Expert

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Describe two problems in using the Black option on futures pricing model for pricing options on Eurodollar futures ?

Explain why the Black option on futures pricing model is simply a pricing model for options on instruments with a zero cost of carry?

Construct an arbitrage example involving an asset that can be sold short, and use it to explain the cost of carry model for pricing futures.

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Financial Management, Finance

Category:- Financial Management
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