What is the price of a 3 month european put option

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1. The price of a non-dividend-paying stock is $19 and the price of a 3-month European call option on the stock with a strike price of $20 is $1. The risk-free rate is 4% per annum. What is the price of a 3-month European put option with a strike price of $20?

2. Explain why the arguments leading to put-call parity for European options cannot be used to give a similar result for American options.

3.What is a lower bound for the price of a 6-month call option on a non-dividend-paying stock when the stock price is $80, the strike price is $75, and the risk-free interest rate is 10% per annum?

Reference no: EM131237087

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