1. Which of the following options will NOT be exercised early?
A. Put on a dividend paying stock
B. Call on a non-dividend paying stock
C. Put on a non-dividend paying stock
D. Call on a dividend paying stock
2. Consider a European put option expiring in 90 days on a non-dividend-paying stock trading at 82 when the risk-free rate is 4%. The lower bound for this European put option with an exercise price of 85 is:
A. $2.39.
B. $2.18.
C. $0.
D. $2.11.