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SOLVED: Calculate the price of a 1 -year European option to give up 100 ounces of silver in exchange for 1 ounce of gold. The current prices of gold and silver are $ 380 and $ 4 respectively; the risk-free interest rate is 10 % per annum; the volatility of each commodity price is 20 % ; and the correlation between the two prices is 0.7, Ignore storage costs.
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