A Stock Is Currently Trading at a Price of 22 $C ( 20 ) = 3.35$

question 12

Multiple Choice

A stock is currently trading at a price of 22.You observe the following prices for European put options on the stock (the strikes are in parentheses) : $C ( 20 ) = 3.35$ and $C ( 22 ) = 1.95$ .Given this information,you can conclude that the minimum price of the 24-strike call consistent with no-arbitrage is

• A)0.00.
• B)0.55.
• C)1.40.
• D)2.00.

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