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What is the risk-free interest rate

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You buy a share of stock, write a 1-year call option with strike price X = $100 and buya 1-year put option with strike price X = $100. The net outlay required to establish this portfolio is $97. The stock pays no dividends. What is the risk-free interest rate?

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A stock's price is 100. It is expected to pay a dividend of $2 per share at year-end. Anat-the-money European put option with 1 year maturity sells for $7. If the annual interest rate's 5%, what should be the price of an "at-the-money" European call option on the stock with 1 yr maturity.

Reference no: EM131317548

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