3. (1 point) European call and put options on FOR stock with one year until expiration are available for trading at the following prices: Strike Price $40 $60 Call $12.00 $3.50 Put $1.00 $10.50 Zero-coupon bonds paying one dollar one year from now are currently selling for $0.90. A one-year forward contract to sell FOR with a delivery price of $54 has a payoff of 54 - Si, where Si is the price of FOR stock at the end of the year. (a) (1/2 point) What portfolio of the options and zero-coupon bonds replicates the payoff of the forward contract with a delivery price of $54? (b) (1/2 point) What is the proper current value of the forward contract? (Hint: The value is not necessarily zero, because the delivery price of $54 may not be equal to the current forward price.) 3. (1 point) European call and put options on FOR stock with one year until expiration are available for trading at the following prices: Strike Price $40 $60 Call $12.00 $3.50 Put $1.00 $10.50 Zero-coupon bonds paying one dollar one year from now are currently selling for $0.90. A one-year forward contract to sell FOR with a delivery price of $54 has a payoff of 54 - Si, where Si is the price of FOR stock at the end of the year. (a) (1/2 point) What portfolio of the options and zero-coupon bonds replicates the payoff of the forward contract with a delivery price of $54? (b) (1/2 point) What is the proper current value of the forward contract? (Hint: The value is not necessarily zero, because the delivery price of $54 may not be equal to the current forward price.)