7. WT Foods stock is selling for $38 a share. The 6-month $40 call on this stock is selling for $2.01 while the 6-month $40 put is priced at $3.60. What is the continuously compounded risk-free rate of return? A) 2.7 percent B) 2.4 percent C) 1.8 percent D) 1.5 percent E) 2.1 percent

3. All of the following affect the value of a call option except the:

A) strike price.

B) stock price.

C) standard deviation of the returns on a risk-free asset.

D) continuously compounded risk-free rate.

E) time to maturity.