Suppose C and P Are the Current Prices of a European

question 18

Multiple Choice

Suppose c and p are the current prices of a European call and put,while c_A and p_A are those corresponding to American options.If today's price of the stock underlying the options is S,a zero-coupon bond that matures on the common expiration date for the options is B,and the common strike price is K,then the following statement is INCORRECT:

• A) c \(\ge\)max(S - BK,0)
• B) c_A \(\ge\)max(S - BK,0)
• C) c \(\ge\) max(BK - S,0)
• D) p \(\ge\) max(BK - S,0)
• E) p_A \(\ge\) max(K - S,0)

---

Definitions:

Self-awareness

Self-awareness is the conscious knowledge of one's own character, feelings, motives, and desires, acting as a fundamental part of emotional and psychological maturity.

Perceptual Constancy

The brain's ability to recognize objects as the same under different conditions, such as changes in illumination, distance, or angle.

Dynamic Perception

The ability to perceive motion and changes in the environment, integrating sensory information over time.

Biological Patterns

Refers to recurring characteristics or events in the biological world, such as genetic sequences, behavioral phenomena, or growth formations in organisms.