Derive the upper and lower bound for a six-month call, Finance Basics

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Derive the upper and lower bound for a six-month call

Question: Derive the upper and lower bound for a six-month call option with strike price K=$75 on stock XYZ. The spot price is $80. The risk-free interest rate (annually compounded) is 10%. If the option price is below the lower bound, describe the arbitrage strategy.

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Finance Basics: Derive the upper and lower bound for a six-month call

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Finance Basics: Derive the upper and lower bound for a six-month call

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