Inclusive have the following common conditions (unless stated):
the riskless interest rate r > 0 ;
the underlier is trading at a spot price S ; and
all options are European vanillas on the same underlier and have the same maturity date ?T=0.
?Question1 ?What are the no-arbitrage boundary conditions for the value of a European vanilla Call option with strike price K1 ? ?
Question 2 ?Another European vanilla Call option with strike price K2 > K1 is trading in the market. What are the new no-arbitrage boundary conditions for the value of the European vanilla Call option with strike price K1 ? ?
Question 3 ?Another European vanilla Call option with strike price K3 is trading in the market. At the expiry of the three options (i.e. at T = 0 ) what are the new no-arbitrage boundary conditions for the value ?of the European vanilla Call option with strike price K1if K3