Exercise 1.6. (Hedging a long position-one period). Consider a bank that has a long position in the European call written on the stock price in Figure 1.1.2. The call expires at time one and has strike price K 5. In Section 1.1, we determined the time-zero price of this call to be Vo = 1.20. At time zero, the bank owns this option, while ties up capital Vo = 1.20. The bank wants to earn the interest rate 25% on this capital until time one (i.e., without investing any more money, and regardless of how the coin tossing turns out, the bank wants to have 5 1.20 = 1.50 4. at time one, after collecting the payoff from the option (if any) at time one). Specify how the bank's trader should invest in the stock and money markets to accomplish this