7.5 Upper bound for Options prices It should be relatively easy to see that C<So and c≤S Otherwise, you could make a risk-less profit by buying the stock and selling the option Likewise p≤ Xe-ri and P≤X Otherwise, you could make a risk-less profit by selling the option and investing the proceeds at r Options, Futures, and Other Derivatives, 4th edition@ 2000 by John C. Hull Tang Yincai, Shanghai Normal UniversityOptions, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, Shanghai Normal University 7.5 Upper Bound for Options Prices • It should be relatively easy to see that c  S0 and C  S0 Otherwise, you could make a risk-less profit by buying the stock and selling the option • Likewise, p  Xe-rT and P  X Otherwise, you could make a risk-less profit by selling the option and investing the proceeds at r