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Business, 12.12.2020 17:10 245cat

Suppose a stock can be purchased for $8, a put option on the stock can be purchased for $1.50, and a call option on the stock can be written (i. e., sold) for $.75. If holding these positions in combination can guarantee a payoff of $10 at the end of one year, then what must be the risk-free rate if no arbitrage opportunities exist?

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