. [6 marks] Consider the replicating portfolio (that is, the investment strategy which will give identical payoffs, at the end of one month, to the call op tion) that involves buying h shares in PearMQ today, and borrowing $B for one month. Illustrate this model in a carefully labelled contingent cash ow diagram. Find the values of h and B (round your answers to ve decimal places). . [1 mark] What is the initial cost (net outlay) today of investing in the repli cating portfolio? Round your answer to three decimal places. . [2 marks] What is the fair price (or premium) for the call option? Why? Round your answer to three decimal places. . [2 marks] The contingent payments method will give the same option value as the arbitrage pricing method, as long as the appropriate value is used for p (the probability of an upward price movement). Find the appropriate value of p in this case. (Round your answer to three decimal places.) . [1 mark] Is this call option "in the money", "at the money" or "out of the money