Which One of the Following Is the Correct Expression of the Lower

question 328

Multiple Choice

Which one of the following is the correct expression of the lower bound of a call option price prior to option maturity?

• A) C₀ = S_0.
• B) C₀ = S₁ - S_0.
• C) C₀ is equal to the lesser of S₁ or S₀.
• D) C₀ is equal to the greater of (S₀ - E) or zero.
• E) C₀ is equal to the lesser of (S₀ - E) or zero.

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