Let $0$ K$1$ K$2.$ Assume that the underlying stock price St

follows the Black$-$Scholes

model, with drift $,$ volatility $\backslash$sigma and S$0$ initial price. Let the risk free rate be equal to r$.$

Consider an option having payoff at maturity T

CT $=$ min$\{$max$\{$ST $,$ K$1\},$ K$2\}.$

i$)$ Express the option as a portfolio of European Call, Put and stock.

ii$)$ Compute the initial price of this option.Let $S_t{S}_{0}rT{C}_T=$min$\{max\{S_T,K_1\},K_2\}\mathrm{.}0.$ Assume that the underlying stock price $S_t$ follows the Black$-$Scholes

model, with drift $,$ volatility $$ and $S_0$ initial price. Let the risk free rate $be$ equal $tor.$

Consider $an$ option having payoff $at$ maturity $T$

$C_T=$min$\{max\{S_T,K_1\},K_2\}.$

$i$