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FedEx is selling for $105 a share. A FedEx call option with one month until expiration and an exercise price of $121 sells for $2.50 while a put with the same strike and expiration sells for $18.00.

a. What is the market price of a zero-coupon bond with face value $121 and 1 month maturity? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

b. What is the risk-free interest rate expressed as an effective annual yield? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Financial Management, Finance

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