Project #43380 - Price level Put-Call Parity Problem

I need to see the work in how to solve this problem. I have the answer but not the work to get to the solution. It needs to be done in a word document. No handwritten images.

Foranon-dividendpayingstock,ashareofstockissellingfor$52pershare.Aone-year (European)calloptionwithastrikepriceof$55issellingfor$13. Aone-year(European)put optionwithastrikepriceof$55issellingfor$12.Whichofthefollowinginterestratesproduces nearlynoarbitrageopportunity?

(A).

3.5%

(B).

5.5%

(C).

7.5%

(D).

9.5%

 

Answer:(C)Hint:PricelevelPut-CallParity

Subject Business
Due By (Pacific Time) 10/13/2014 11:00 pm
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