The level of fund flows between household savers

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Reference no: EM132062062

1. You buy a share of stock, write a 1-year call option with X = $60, and buy a 1-year put option with X = $60. Your net outlay to establish the entire portfolio is $58.5. The stock pays no dividends.

What is the risk-free interest rate? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$"sign in your response.)

Risk-free rate %

2. Discuss this concept: "In an economy without FIs, the level of fund flows between household savers and the corporate sectors is likely to be quite low."

Reference no: EM132062062

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