A 1977 paper by Phelim Boyle pioneered Monte Carlo methods for valuing these things, which are optimal to use when there are multiple sources of uncertainty. William Sharpe proposed a binomial tree model for the price of these things which under the CRR method sets u as “e raised to sigma square root delta t” and d as the inverse of u. A model originally for these things makes four assumptions about the market, including no arbitrage (-5[1])and no transaction costs. The (*) American type of these things can be exercised at any time, in contrast (10[1])to the European type of these things, whose price can be calculated using the Black–Scholes formula. For 10 points, name these derivatives whose main varieties are (10[1])called puts and calls (10[1])and give the holder the sell and purchase rights (-5[1])for an underlying asset. ■END■ (10[2]0[2])