A put option with a $35 strike price on Bavarian Sausage stock will expire in one year.If you know that the stock currently sells at $38 that the put on the same stock has a value of $6.85,and the value of the call is $11.87,what is the implied risk free rate?
A) 3.57%
B) 5.39%
C) 8.27%
D) 6.12%
Correct Answer:
Verified
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