Your net outlay to establish the entire portfolio is 1960


You buy a share of stock, write a one-year call option with X = $21, and buy a one-year put option with X = $21. Your net outlay to establish the entire portfolio is $19.60. What must be the risk-free interest rate? The stock pays no dividends. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

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Financial Management: Your net outlay to establish the entire portfolio is 1960
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