What is annual continuously compounded rate of interest

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Reference no: EM131829106

1. A put option and a call option with an exercise price of $65 and three months to expiration sell for $1.25 and $5.50, respectively.

If the risk-free rate is 4.3 percent per year, compounded continuously, what is the current stock price?

2. A put option and a call option with an exercise price of $50 expire in four months and sell for $1.02 and $5.30, respectively.

If the stock is currently priced at $53.20, what is the annual continuously compounded rate of interest?

Reference no: EM131829106

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