What is the difference between a European option and an American option (irrespective of

whether these are call or put options)? Assume that after one time period, the value of a

stock (whose present value is R200) would be either R300 or R150. Suppose that, for any y,

at a cost of Cy, one can purchase at a time-0 the option to buy y shares of the stock at time-1

at a price of R175 per share. For what values of c, no-arbitrage will be possible? (Provide

necessary details). Do not use arbitrage theorem.