Problem

You buy a share of stock, write a one-year call option with X = $10, and buy a one-year pu...

You buy a share of stock, write a one-year call option with X = $10, and buy a one-year put option with X = $10. Your net outlay to establish the entire portfolio is $9.50. What must be the risk-free interest rate? The stock pays no dividends.

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