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Netflux is selling for $105 a share. A Netflux call option with one month until expiration and an exercise price of $118 sells for
Netflux is selling for $105 a share. A Netflux call option with one month until expiration and an exercise price of $118 sells for $2.50 while a put with the same strike and expiration sells for $15.10. Required: a. What must be the market price of a zero-coupon bond with face value $118 and 1-month maturity? Note: Round your answer to 2 decimal places. b. What is the risk-free interest rate expressed as an effective annual yield? Note: Round your answer to 2 decimal places. Answer is complete but not entirely correct. a. Market price b. Risk-free interest rate $ 120 50x 5.09%
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