Which One of the Following Is the Lower Price Bound

question 91

Multiple Choice

Which one of the following is the lower price bound for the intrinsic value of an American call option on a stock?

• A)$0
• B)strike price
• C)stock price
• D)Max(S − K, 0)
• E)Max(K − S, 0)

---

Definitions:

Endocrine System

A network of glands in the body that produce and release hormones directly into the blood to regulate various bodily functions, such as metabolism, growth and development, and mood.

Dysfunctions

Impairments or abnormalities in the functioning of a system, organ, or structure in the body.

Etiology

The study of the causes or origins of diseases or disorders, including the factors contributing to the development of a condition.

Disorder

A disruption to normal physical or mental functions, presenting as a set of symptoms and signs that collectively indicate a particular disease or psychological condition.