A strangle is to hold a long European put at strike K1 and a long European call at strike K2, where S is the underlying and K1 < S < K2. Assume that the underlying stock has a price of 100, an expected yearly return of = 7% and a volatility of 35%. The (continuously compounded) risk-free rate is given by r = 1%. The time to maturity is one year. How can you replicate the payoff using only in-the-money options, the stock and the money market account?