agulani

ok... e.g. schweser #5, page 206 or cfai #6, page 103 -> upper/lower bounds for options

min european put value = max[X/(1+r)^(T-t)-S0,0]

with T=4months=4/12years -> max[X/(1+r)^.25-S0,0]

since in this 4months there is no compound interest, i dont understand why we're not doing this: max[X/(1+r*.25)-S0,0]