A call option on a stock with strike 75 expiring in 1 year, Finance Basics

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A call option on a stock with strike 75 expiring in 1 year

Question: A call option on a stock with strike $75 expiring in 1 year costs $12. A put option on the same stock with strike $75 expiring in 1 year costs $7.50. Assuming the initial stock price is $80 and that the stock is scheduled to pay a single dividend in 6 months of $5, what is the risk-free rate of interest?

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Finance Basics: A call option on a stock with strike 75 expiring in 1 year

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Finance Basics: A call option on a stock with strike 75 expiring in 1 year

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