What is a lower bound for the price of a 1-month European put option on a non-
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What is a lower bound for the price of a 1-month European put option on a non- dividend-paying stock when the stock price is $12, the strike price is $15, and the risk-free interest rate is 6% per annum? 94. Give two sons why the early exercise of an American call option on a non-dividend- paying stock is not optimal. The first reason should involve the time value of money. The second should apply even if interest rates are zero.
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