What is the implied riskless rate


Problem

Assume that the spot price of gold is $1800 per ounce, six month at-the-money European puts and calls are selling for $133.51 each and the continuous compounding annualized riskless interest rate for the next 6 months is 4%.

1. Are there any opportunities for arbitrage profits? If so, what is the strategy?
2. Using the prices of the put and the call and the current price of the underlying asset, what is the implied riskless rate?

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Finance Basics: What is the implied riskless rate
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