Question: 1) Give a numerical example (choosing x, k, r, T t, ) in which it is obvious (without any formulas) that American put price on

1) Give a numerical example (choosing x, k, r, T t, ) in which it is obvious (without any formulas) that American put price on a nondividend paying stock is larger then the corresponding European put price. 2) What are the parameters affecting prices European and American calls and puts. How do the prices change when one of the parameters changes with all the others remaining the same? 3) Suppose that we have three European puts with strikes 45, 50, and 55 and the same maturity 1 year. Their prices are 6.00, 8.90, 11.10. Is such situation possible. Is it possible to do an arbitrage

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