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Question For the next few questions, use the following information: For the following problems assume the effective 6-month interest rate is 2%, the S&R

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Question For the next few questions, use the following information: For the following problems assume the effective 6-month interest rate is 2%, the S&R 6-month forward price is $1020, and use these premiums for S&R options with 6 months to expiration: Strike Call Put 120.405 51.777 950 1000 93.809 74.201 1020 84.47 84.47 1050 71.802 101.214 1107 51.873 137.167 1. What should it cost to implement the box spread strategy (Buy a call and sell a put both with a strike price of $1000 while simultaneously buying a put and selling a call with a strike price of $1050)? 2. What is the implied effective 6-month interest rate from the box spread? (decimal form) 3. Say you wanted to borrow $68.63 money risk-free by trading in the options above. What strategy would accomplish this? call and selling a. Buy a put and sell a call both with a strike price of $950 while simultaneously buying a a put with a strike price of $1020 b. Selling call options at strike prices of $950 and $1000, while buying a put option with a strike price of $1020 c. Buy a call and sell a put both with a strike price of $1000 while simultaneously buying a put and selling a call with a strike price of $1050 4)

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