Wesleyville Markets stock is selling for $36 a share. The 9-month $40 call on this stock is selling for $2.23

Wesleyville Markets stock is selling for $36 a share. The 9-month $40 call on this stock is selling for $2.23 while the 9-month $40 put is priced at $5.63. What is the continuously compounded risk-free rate of return?    A.  0.87 percent B.  1.11 percent C.  1.38 percent D.  1.56 percent E.  2.02 percent ($40 × e-R × 0.75) = -$2.23 + $36 + $5.63 $40 e-0.75R = $39.40 ln(e-0.75R) = ln0.985 -0.75R = -0.0151 R = 2.02 percent

57.

The stock of Edwards Homes, Inc. has a current market value of $23 a share. The 3-month call with a strike price of $20 is selling for $3.80 while the 3-month put with a strike price of $20 is priced at $0.54. What is the continuously compounded risk-free rate of return?    A.  4.43 percent B.  4.50 percent C.  4.68 percent D.  5.00 percent E.  5.23 percent ($20 × e-R × 0.25) = -$3.80 + $23 + $0.54 $20 e-0.25R = $19.74 ln(e-0.25R) = ln 0.987 -0.25R = -0.013085 R = 5.23 percent

58.	What is the value of d2 given the following information on a stock?        A.  0.1218 B.  0.1225 C.  0.1313 D.  0.1335 E.  0.1340 d2 = 0.63355 - [0.58 × (0.751/2)] = 0.1313

59.	Given the following information, what is the value of d2 as it is used in the Black-Scholes option pricing model?        A.  -1.1346 B.  -0.8657 C.  -0.8241 D.  -0.7427 E.  -0.7238 d2 = -0.65829 - [0.55 × (0.751/2)] = -1.1346