What is lower bound for option such that there are


A stock price (which pays no dividends) is $50 and the strike price of a two year European put option is $54. The risk-free rate is 3% (continuously compounded). What is a lower bound for the option such that there are arbitrage opportunities if the price is below the lower bound and no arbitrage opportunities exist if it is above the lower bound?

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Financial Management: What is lower bound for option such that there are
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