You buy a share of stock write a one-year call option with


You buy a share of stock, write a one-year call option with X = $18, and buy a one-year put option with X = $18. Your net outlay to establish the entire portfolio is $17.50. 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: You buy a share of stock write a one-year call option with
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