20. 1-year European calls and puts with an exercise price equal to 100 (X=100) trade at prices of $15 and $5, respectively (C=15, P=5). If the risk-free rate is 0%, what is the stock price?

a. 100

2. 110
3. 120
4. Not enough information to tell.

0. 21. A replicating portfolio for a derivative security is
1. A portfolio consisting of long and short positions in the derivative.
2. A portfolio that has the same payoffs as the derivative.
3. A portfolio that has payoffs at least as great as, and in some states greater than, the payoffs from the derivative.
4. A portfolio that combines the derivative with another derivative on the same underlying so as to make the portfolio riskless.