1. A stock is worth $10 today and will be worth either $14 or $8 two years from today. It pays no dividend. r=6%. Using a one-period binomial model... (4pts) a. how many shares (and indicate whether you are long or short) replicates the payoff of a two-year call with K=$11? (4pts) b. how many dollars (and indicate whether you borrow or lend) in a risk-free bond replicates the payoff of a two- year call with K=$11? (4pts) c. what is the value of C(11,2)?