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my question is: the current spot price of cotton is USD 0.7409 per pound. The cost of storing and insuring cotton is USD 0.0042 per pound per month payable at the beginning of every month. The risk free rate is 5%. A 3-month forward contract trades at USD 0.7415 per pound. How can i...

i have a question like that. I didn't understand how to find U and D values in that problem? Problem A risk manager for bank xyz, marki is considered writing a 6 month american put option on a non-dividend paying stock ABC. The current stock price is USD 50 and the strike price of the option...