A bank tries to construct a protected principal note, where it receives $100 from its clients and guarantees to pay back $100 two years later. In this strategy, the bank first buys a two-year risk-free bond. Also, it considers buying a two-year European put option on a non-dividend paying stock that currently sells for $80. The risk-free interest rate is 4%. Which of the following puts is certainly infeasible for the bank under no-arbitrage condition? Put with a strike price of $96 Put with a strike price of $94 Put with a strike price of $92 All of the above puts are feasible. A non-dividend-paying stock currently sells for $280. A 2-year European call option on the stock with the strike price of $260 sells for $40. The risk-free rate is 2% per annum. If there is no arbitrage, what should be the price of the 2-year European put option with the same strike price? $9.805 $12.174 $14.851 $29.805 A bank tries to construct a protected principal note, where it receives $100 from its clients and guarantees to pay back $100 two years later. In this strategy, the bank first buys a two-year risk-free bond. Also, it considers buying a two-year European put option on a non-dividend paying stock that currently sells for $80. The risk-free interest rate is 4%. Which of the following puts is certainly infeasible for the bank under no-arbitrage condition? Put with a strike price of $96 Put with a strike price of $94 Put with a strike price of $92 All of the above puts are feasible. A non-dividend-paying stock currently sells for $280. A 2-year European call option on the stock with the strike price of $260 sells for $40. The risk-free rate is 2% per annum. If there is no arbitrage, what should be the price of the 2-year European put option with the same strike price? $9.805 $12.174 $14.851 $29.805