An investor was given the following probability distribution for the 1-year holding-period return for KMP stock, which currenty trades at $100 per share. Whatever the state of the economy, KMP will pay a dividend of $4 per share over the year. State of the Probability economy Boom Normal 0.3 0.5 Recession 0.2 HPR % 18 12 -5 A put on KMP stock has an exercise price of $110, a time to expiration of 1 year and a premium of $12. The investor is considering the value at the end of 1 year of two alternative strategies conducted today. 1. Buy 1,000 shares of KMP stock (Uninsured Portfolio). 2. Buy 1,000 shares of KMP stock and simultaneously buy 1 put on each share of KMP stock (Insured Portfolio). Consider the following statements. 1. If the economy is in a normal state at the end of the year, the value of the uninsured portfolio would be $124,000. Il. If the economy is in a recession state, at the end of the year, the value of the insured portfolio would be $114,000. Which of the following is correct? a. Statement 1 is correct, Statement Il is incorrect. b. Statement I is incorrect. Statement Il is correct. c. Statements I and Il are correct. d. Statements I and Il are incorrect.