Explanation

C is correct because:

• European and American call options: The maximum possible price is equal to the current stock price (USD 100.00). No rational investor would pay more for an option than the current price of the underlying asset.

• European put option: The upper bound is the present value of the strike price. With strike price K = 90, risk-free rate r = 12%, and time T = 0.25 years: $PV(K) = K \times e^{-rT} = 90 \times e^{-0.12 \times 0.25} = 90 \times e^{-0.03} = 90 \times 0.9704 = 87.34$

• American put option: The upper bound is equal to the strike price (USD 90.00). Since American options can be exercised immediately, the maximum value cannot exceed the immediate exercise value.

Why other options are incorrect:

• A: Incorrectly uses present value for call options and present value for American put option
• B: Incorrectly uses present value for European call and strike price for European put
• D: Incorrectly uses strike price for European put instead of present value of strike price