Question: You are given the following data. The term structure is flat with interest rates 2% continuously compounded for all maturities. S(0) = 60, X =

You are given the following data. The term structure is flat with interest rates 2% continuously compounded for all maturities. S(0) = 60, X = 60, the time to expiration is 6 months A dividend of size 2 dollars is due in 3 months. Compute the lower bound on the price of an American put. With strike 60 and time to expiration of 6 months. Show all steps in your logic and calculations.

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