Assume that the current stock price is $50 per share, that the call options can be purchased with an exercise price of $60 per share, that bank loans can be obtained for a 10 percent nominal rate, and that at expiration of the option in three months, the stock will be either valued at $30 or $70. Show that it is possible to replicate the stock payoff by borrowing and buying a call option.

*Please show your calculations*

Thank you in advance for your help.