单选题

A European call option on a non-dividend paying stock with a strike price of $25.00 expires in 3 months. The underlying stock currently trades at $29.00. The risk-free rate is 5.00%. The lower bound for the European call is closest to:

A、 $0.00
B、 $4.00
C、 $4.30

【正确答案】 C

【答案解析】

C is correct because the lower bound on a European call price is either zero or the underlying price minus the present value of the exercise price, whichever is greater.