A European call written on the stock with a maturity of 1 year and a strike price of 100 is worth 5. The underlying stock is worth 100 and the value of a European put with a maturity of 1 year and a strike price of 100 is 3. The annual interest rate is closest to ?
(a) 5.00 % (b) 4.00 % (c) 3.00 % (d) 2.00 %
can anyone tell me how to solve this question?
thanks
The annual interest rate is closest to 4.00% (option b)
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