PLEASE USE EXCEL TO ANSWER THE QUESTIONS

100. 10. ABC stock is currently at 100. In the next period, the price will either increase by 5% decrease by 5%. The risk-free rate of return per period is 3%. Consider a put options ABC stock with strike K (a) Set up a replicating portfolio to value the put. (b) Suppose the put is trading for $2. Explain how you would exploit the resulting arbitrage opportunity. in nadal with the narameters LOS