1. A put option and a call option with an exercise price of $65 expire in three months and sell for $.92 and $5.50, respectively. If the stock is currently priced at $68.38, what is the annual continuously compounded rate of interest?
2. You will require $700 in 5 years. If you earn 5% interest on your funds, how much will you need to invest today in order to reach your savings goal? What are the calculations to get the answer on a financial calculator?