A straddle is the simultaneous purchase of an otherwise identical put and call (same underlying asset, same strike price, and same expiration date). Using the Black-Scholes formula (for non-dividend paying assets), outline as precisely as possible its replicating portfolio strategy (using only the underlying asset and cash) for different levels of the underlying asset price.\ \ Assume the strike of the call and put options is K=1300, and they have a one year maturity. The risk-free rate is 5%, and the volatility of the underlying asset is 23%. Assume the underlying asset does not pay dividends.\ \ What are the number of shares (Delta) and the cash positions (riskfree investments) that you would need to hold if the underlying asset took in the different values listed in the following table?\ (Use at least four decimals for intermediate calculations, and write your final answers with two decimals)\ \ Stock Price Dynamics\ S 1200 1250 1300\ Shares \ Cash