Suppose the risk-free interest rate is 6% per year. You are contemplating investing $107.55 in a 1-year

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Suppose the risk-free interest rate is 6% per year. You are contemplating investing $107.55 in a 1-year CD and simultaneously buying a call option on the stock market index fund with an exercise price of $110 and expiration of 1 year. Using the scenario analysis of Spreadsheet 5.1, what is the probability distribution of your dollar return at the end of the year? p-963

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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