The current price of a non-dividend paying asset is 65 the, Ask an Expert

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The current price of a non-dividend paying asset is $65, the riskless interest rate is 5% p.a. continuously compounded, and the option maturity is five years. What is the lower boundary for the value of a European vanilla put option on this asset with strike price of $80?

Are there two lower bounds in this question? Is there any relevance to the option premium or the payoff?

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Financial Management, Finance

Category:- Financial Management
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