The correct answer is C.

By put-call parity for a non-dividend-paying stock:

$S_0 + p = c + Ke^{-rT}$

Rearrange to get the covered call value:

$S_0 - c = Ke^{-rT} - p$

Substituting the values:

• $S_0 = 20$
• $p = 2$
• $K = 20$
• $r = 4\%$
• $T = 0.5$

$S_0 - c = 20e^{-0.04\times0.5} - 2 \approx 19.60 - 2 = 17.60$

So the total initial cost to write a covered call is $17.60.