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4. Julie Synthetic enjoys creating synthetic securities even though she knows the no- arbitrage principle holds. Today she has created a synthetic security out of

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4. Julie Synthetic enjoys creating synthetic securities even though she knows the no- arbitrage principle holds. Today she has created a synthetic security out of the following components: she purchased a share of IBM stock today for $95 she wrote a call option on IBM she purchased a put option on IBM Both the call and put options are European; both have an exercise price equal to $100; and both have one year until expiration. The risk-free rate of interest is 5% per year effective a) Fill in the table below indicating the payoffs in one year from holding Julie's portfolio. (6 points) Stock Price

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