Question 10 2 pts John wishes to buy a European put option on ABC, Inc., a non-dividend-paying common stock, with a strike price of $50 and six months until expiration. ABC's common stock is currently selling for $40 per share, and Tom expects that the stock price will either rise to $70 or fall to $25 in six months. The risk-free rate over the next six months is 2.47% (over next one year is 5%). How do you create a replicating portfolio with identical payoffs to the put option just described? Buy 1.80 of a share of stock and borrow $38.89 Buy .56 of a share of stock and borrow $37.95 Short .56 of a share of stock and lend $38.89 Short .56 of a share of stock and lend $37.95 Short 1.80 of a share of stock and lend $37.95 Question 9 The lower bound on a call's value is defined as the: O lesser of the strike price or zero. greater of the strike price or zero. O lesser of the stock price minus the exercise price or zero. O lesser of the strike price or the stock price. O greater of the stock price minus the exercise price or zero. 1 pts