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You buy a share of stock, write a 1-year call option with X = $75, and buy a 1-year put option with X = $75.
You buy a share of stock, write a 1-year call option with X = $75, and buy a 1-year put option with X = $75. Your net outlay to establish the entire portfolio is $73.8. The stock pays no dividends.
a. What is the payoff of your portfolio?
Payoff ?
b. What must be the risk-free interest rate? (Round your answer to 2 decimal places.)
Risk - free rate ?%
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