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A combination of Long 1 Put at K1, Short 2 Puts at K2, Short 100 shares of Stock at K2 and Long 1 Call at K(3) is an example of: O A Strangle O B Straddle C Bull Spread O D Butterfly

Given: S(0) 50; r 0.05; T 6 months; K49. What is a lower bound for an American Call Option on non-dividend paying stock? O A C<or 50 O B Cor 2.21 c c>or=1

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Answer #1

D. Bucton fiy llary. Call-at-K2 and StníkeLK) = 49 C a an 2-21ommen

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