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Question 8 What is the lower bound for the price of a two - year European call option on a stock when the stock price

Question

8

What is the lower bound for the price of a two

-

year European call option on a stock when

the stock price is $

20,

the strike price is $

15,

and the continuously compounded risk

-

free

interest rate is

5 %

and there are no dividends?

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