Question Consider the following one period binomial stock price model for a nondividend paying stock: You are given: 1. The period is 3-months. II. The continuously compounded risk-free interest rate is 1%. 110 100 90 Consider a 3-months 100-strike European call on the stock. Construct a replicating portfolio for the call option. Possible Answers A The replicating portfolio consists of 0.5 purchased shares and 44.55 borrowed the risk-free rate. B The replicating portfolio consists of 0.5 sold shares and 44.55 invested at the risk-free rate. c The replicating portfolio consists of 1 purchased shares and 44.89 borrowed at the risk-free rate. D The replicating portfolio consists of 0.5 purchased shares and 44.89 borrowed at the risk-free rate. E None of the above