(Answered) Suppose the price of a stock is 50 a share a call option on

Economics

Suppose the price of a stock is $50 a share. A call option on the stock with four months until expiration date and exercise price $58 sells for $3. A put on the stock with the same strike price and expiration date sells for $7.

A. How much would a risk-free zero-coupon bond with maturity 4 month and face value $58 cost?

B. What is the bond equivalent and the effective annual yield of this type of bond?

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Business Economics, Economics

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