1) Consider an American-style put option on IBM shares, which are currently trading at $ 140. The strike price of the put option is $135 and its maturity is 1 year. The 1-year T-Bill is currently trading at a yield of 4.70% (on a discount basis). Assume that IBM pays dividends on a continuous basis, where the dividend yield is 4.70%.

a) Based only on the above information, what is the minimum price of the option?

b) What would the minimum price be if the option were European-style?