- Non-dividend paying stock XYZ is trading at $20. The continuously compounded risk free rate is 2%. The minimum price of a four-month American put option at strike $22 is:

A. $2.00

B. $0

C. $1.27

D. $1.89

- You sell two ABC August 50 call contract and sell one ABC August 50 put contract. The call premium is $1.25 and the put premium is $4.50. Your strategy will pay off only if ABC stock price in August is:

A. between $46.5 and $57

B. between $43 and $53.5

C. between $44.25 and $55.75

D. between $43 and $57