- The price per share of a non-dividend paying stock is $50. Assume that the price of a three-month European put with strike K= $52 is equal to the price of the three-month European call with the same strike. What is the continuously compounded rate of interest for three month's maturity?

A. 9.23%

B. 12.66%

C. 4.61%

D. 15.69%

- Firm A can borrow at 5% fixed or at Libor plus 0.5% in the fixed and floating rate markets, respectively. Firm B can borrow at 7% fixed or Libor plus 1% in the fixed and floating rate markets, respectively. A wants to borrow floating and B wants to borrow fixed. If A borrows fixed and B borrows floating and they enter into a fixed-for-Libor interest-rate swap in which A pays Libor flat, what swap rate would you suggest to the two firms if you were an unbiased advisor?

A. 5.50%

B. 6%

C. 5%

D. 5,25%