The following quotes were observed for options on a given stock on November 1 of a given year. These are American calls except where indicated. Use the information to answer questions 7 through 20.
The stock price was 113.25. The risk-free rates were 7.30 percent (November) , 7.50 percent (December) and 7.62 percent (January) . The times to expiration were 0.0384 (November) , 0.1342 (December) , and 0.211 (January) . Assume no dividends unless indicated.
-What is the European lower bound of the December 105 call?
Definitions:
Emotional Stability
A personality trait characterized by the ability to remain calm and composed under stress, showing resilience in the face of adversity.
Neuroticism
A feature of an individual's character marked by frequent changes in emotions, feelings of unease, irritability, concern, and a general state of sorrow.
Maturity Principle
A concept that individuals become capable of or interested in certain behaviors or cognitive tasks as they mature.
Conscientious
Personifying carefulness, diligence, and the desire to do a task well.
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