Problem:
You buy a share of stock, write a one-year call option with a strike price X = $21, and buy a one-year put option with a strike price X = $21. Your net initial cost to establish the entire portfolio is $19.60.
Required:
Question: What must be the risk-free interest rate from now until the options maturity date? The stock pays no dividends.
Note: Please explain comprehensively and give step by step solution.