1A. You buy a share of stock, write a one-year call option with X = $19, and buy a one-year put option with X = $19. Your net outlay to establish the entire portfolio is $18.50. What must be the risk-free interest rate and PAYOFF? The stock pays no dividends. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

1B. Masters Corp. issues two bonds with 18-year maturities. Both bonds are callable at $1,075. The first bond is issued at a deep discount with a coupon rate of 6% to yield 11.3%. The second bond is issued at par value with a coupon rate of 12.50% a. What is the yield to maturity of the par bond? (Round your answer to 2 decimal places.)