1. Which of the following statements regarding an option prior to expiration is CORRECT? The minimum value of:
A. a European put is more than the minimum value of an American put.
B. an American call is equal to the minimum value of a European call.
C. a European put is equal to the minimum value of an American put.
D. an American call is more than the minimum value of a European call.
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. $0.
B. $2.39.
C. $2.18.
D. $2.11.