The Stock of EHI Has a Current Market Value of $21.50

question 69

Multiple Choice

The stock of EHI has a current market value of $21.50 a share. The 3-month call with a strike price of $20 is selling for $2.07 while the 3-month put with a strike price of $20 is priced at $.41. What is the continuously compounded risk-free rate of return?

• A) 2.9 percent
• B) 3.0 percent
• C) 4.1 percent
• D) 3.7  percent
• E) 3.2 percent

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