Consider a European call on Procter and Gamble stock (PG) that expires in one period. The current stock price is $120, the strike price is $130, and the risk-free rate is 5%. Assume that PG stock will either go up to $150 (probability = .4), or go down to $90 (probability = .6). Construct a replicating portfolio based on shares of PG stock and a position in a risk-free asset, and compute the price of the call option. Replicating Portfolio is Buy 0.33 shares and Borrow $28.57... Call Price =$11.43 Replicating Portfolio is Buy 0.33 shares and Buy $28.57 in bonds ... Call Price =$68.57 Replicating Portfolio is Buy 0.66 shares and Buy $18.23 in bonds ... Call Price =$68.57 Replicating Portfolio is Buy 0.66 shares and Borrow $13.57... Call Price =$11.43 Consider a European call on Procter and Gamble stock (PG) that expires in one period. The current stock price is $120, the strike price is $130, and the risk-free rate is 5%. Assume that PG stock will either go up to $150 (probability = .4), or go down to $90 (probability = .6). Construct a replicating portfolio based on shares of PG stock and a position in a risk-free asset, and compute the price of the call option. Replicating Portfolio is Buy 0.33 shares and Borrow $28.57... Call Price =$11.43 Replicating Portfolio is Buy 0.33 shares and Buy $28.57 in bonds ... Call Price =$68.57 Replicating Portfolio is Buy 0.66 shares and Buy $18.23 in bonds ... Call Price =$68.57 Replicating Portfolio is Buy 0.66 shares and Borrow $13.57... Call Price =$11.43