0 be accepted 1. Coesider a Europesn derivative security with the Sollowing payol structure Vr- 9lSr) as a function of the underlying aset S 0S 60 The option expires one year from today. The price of a ero coupon bed maturing one year from today $0.99. Currently the stock price is 889 per share. (A) Draw the payoff diagram, thnt is, plot r as a functioe of S b) Suppose you are abke to write (ll) this option at time 0 for 890. Create an arbitrage portfolio (c) Suppose yon are able to buy this optkn at tine 0 fr S9 Create aarbitrage portfolio. d) Show how to replicate this option by a portfolio containing only stock, boods and call options (e) Same question as in (d) but this time use put options instead of call bordd t - : 0 be accepted 1. Coesider a Europesn derivative security with the Sollowing payol structure Vr- 9lSr) as a function of the underlying aset S 0S 60 The option expires one year from today. The price of a ero coupon bed maturing one year from today $0.99. Currently the stock price is 889 per share. (A) Draw the payoff diagram, thnt is, plot r as a functioe of S b) Suppose you are abke to write (ll) this option at time 0 for 890. Create an arbitrage portfolio (c) Suppose yon are able to buy this optkn at tine 0 fr S9 Create aarbitrage portfolio. d) Show how to replicate this option by a portfolio containing only stock, boods and call options (e) Same question as in (d) but this time use put options instead of call bordd t