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Posted on Oct 06, 2024

The lower bound for the price of a put option written on a non dividend paying stock is: S T Ke -rt S 0 Ke

The lower bound for the price of a put option written on a non dividend paying stock is:

S_T Ke^-rt
S₀
Ke^-rt
Ke^-rt - S_T
S₀ - S_T

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