2. More one period replicating portfolios: Suppose a stock index is currently trading at 4000 (and to keep things simple, we assume it also pays no dividendsat least for now!). Next period the index will either go up by 11% or down by 9%. The simple one-period risk-free rate is 1%. (a) What are the replicating portfolios for the one-period calls on the index struck at K = 3800 and K - 4200? (b) So what are these calls' prices? (c) What are the replicating portfolios for the one-period puts with the same two strikes? (d) So what are these puts' prices? (e) Again, please also report the risk-neutral probability of the up-move, and use this to price both the put and the call using the risk-neutral pricing methodology. 2. More one period replicating portfolios: Suppose a stock index is currently trading at 4000 (and to keep things simple, we assume it also pays no dividendsat least for now!). Next period the index will either go up by 11% or down by 9%. The simple one-period risk-free rate is 1%. (a) What are the replicating portfolios for the one-period calls on the index struck at K = 3800 and K - 4200? (b) So what are these calls' prices? (c) What are the replicating portfolios for the one-period puts with the same two strikes? (d) So what are these puts' prices? (e) Again, please also report the risk-neutral probability of the up-move, and use this to price both the put and the call using the risk-neutral pricing methodology