Intro The current price of a non-dividend-paying stock is $100 and you expect the stock price to be either $130 or $50 after 1 years. A European put option on the stock has a strike price of $89 and expires in 1 years. The risk-free rate is 5% (EAR). Part 1 Attempt 1/1 How many shares do you need to sell to create a portfolio that replicates the payoff from one put option? Part 2 Attempt 1/1 How much money do you need to invest in bonds (lend) to create a portfolio that replicates the payoff from one put option? Part 3 Attempt 1/1 What should be the price (premium) of the put option? Intro The current price of a non-dividend-paying stock is $100 and you expect the stock price to be either $130 or $50 after 1 years. A European put option on the stock has a strike price of $89 and expires in 1 years. The risk-free rate is 5% (EAR). Part 1 Attempt 1/1 How many shares do you need to sell to create a portfolio that replicates the payoff from one put option? Part 2 Attempt 1/1 How much money do you need to invest in bonds (lend) to create a portfolio that replicates the payoff from one put option? Part 3 Attempt 1/1 What should be the price (premium) of the put option