Problem 1

Given the following data as of the close of trading on 10/26/18:

Quest Diagnostics (DGX): 91.47

T-bill: Asked 2.28, Days to Maturity 84

Options on DGX: expire January 18, 2019

c	X	p
23.7	70	0.35
17.5	75	0.55
12.9	80	1
8.7	85	1.95
5.2	90	3.4
2.55	95	6.1
1.1	100	9.7
0.45	105	14.2

Show that every option in the table is priced above the lower bound (these are American options). Fill out the following table:

Strike	Lower bound, call	Lower bound, put
70
75
80
85
90
95
100
105