A European-style exotic derivative (with stock as the underlying asset) has a terminal payoff depicted by the thick blue line in the diagram below: 

The y-axis denotes the terminal payoff of the derivative, and the x-axis denotes the terminal share price. The payoff to the above derivative can be replicated using a combination of the following components:

• Buy a zero-coupon bond with a face value of $4
• X
• Y
• Write a put option with a strike price of $1

What are X and Y respectively?

	A.	X = Hold 2 put options, each with a strike price of $6; and Y = Write 2 put options, each with a strike price of $5
	B.	X = Hold 1 put options with a strike price of $12; and Y = Write 1 put option with a strike price of $15
	C.	X = Hold 1 put option with a strike price of $6; and Y = Write 2 put options, each with a strike price of $5
	D.	X = Hold 2 put options, each with a strike price of $6; and Y = Write 3 put options, each with a strike price of $5

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