3. (20 pts) In a simple one period market model consisting of a risky asset and a risk-free asset, suppose the risky asset price satisfies S(0)=100 and S(1)={150,50,withprobability0.8,withprobability0.2, Also, suppose that the risk-free asset price follows A(0)=A(1)=100. (a). Consider a put option with the strike price K=100 and the maturity time T=1. Find the initial price P(0) of this put option under the No Arbitrage assumption. (b). If the price P(0) of the put option in (1a) was 50 , detail an arbitrage strategy. Be specific. 3. (20 pts) In a simple one period market model consisting of a risky asset and a risk-free asset, suppose the risky asset price satisfies S(0)=100 and S(1)={150,50,withprobability0.8,withprobability0.2, Also, suppose that the risk-free asset price follows A(0)=A(1)=100. (a). Consider a put option with the strike price K=100 and the maturity time T=1. Find the initial price P(0) of this put option under the No Arbitrage assumption. (b). If the price P(0) of the put option in (1a) was 50 , detail an arbitrage strategy. Be specific