Suppose Amazon stock is trading for $500 per share, and Amazon pays no dividends. a. What is

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Suppose Amazon stock is trading for $500 per share, and Amazon pays no dividends.
a. What is the maximum possible price of a call option on Amazon?
b. What is the maximum possible price of a put option on Amazon with a strike price of $550?
c. What is the minimum possible value of a call option on Amazon stock with a strike price of $475?
d. What is the minimum possible value of an American put option on Amazon stock with a strike price of $550?
Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.
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Corporate Finance

ISBN: 978-0134083278

4th edition

Authors: Jonathan Berk, Peter DeMarzo

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