Which of the following is the lowest possible value of an American put on a stock with no dividends?
a. X(1 + r)-T
b. X
c. Max(0, X(1 + r)-T - S0)
d. Max(0, X - S0)
e. none of the above
Answer: D
Which of the following is the lowest possible value of an American put on a stock with no dividends?
a. X(1 + r)-T
b. X
c. Max(0, X(1 + r)-T - S0)
d. Max(0, X - S0)
e. none of the above
Answer: D
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.