The lower bound for a European call option on a non-dividend-paying stock is given by the formula: $c \ge \max(S_0 - K e^{-rT}, 0)$

Given:

• Current stock price ($S_0$) = $21
• Strike price ($K$) = $20
• Time to maturity ($T$) = 6 months = 0.5 years
• Risk-free interest rate ($r$) = 10% = 0.10

Calculate the present value of the strike price: $K e^{-rT} = 20 \times e^{-0.10 \times 0.5} = 20 \times e^{-0.05} = 20 \times 0.9512 = 19.024$

Now, calculate the lower bound: $S_0 - K e^{-rT} = 21 - 19.024 = 1.976$

Rounding to two decimal places, the lower bound is $1.98. Thus, option C is correct.