21.

What is the lower bound for the price of a 6 month American put option on a stock when the stock price is $30, the strike price is $40, the continuously compounded risk-free interest rate is 5% and a dividend of $2 is expected in 1 month and in 4 months ?

a.

$10.00

b.

$0

c.

$11.83

d.

$13.30