Suppose company A stock is last time traded at 43.26S, and our analysis shows that in one its price would either increase or decrease by 35%. (i.e. d=0.65, u=1.35) Assume that risk-free rate is 1% and the company pays no dividend in this time period. 1) What would be the payoff for a European Put Option written on Company A equity, with time to maturity of 1 year, and strike price of 355? Calculate the payoff for the up and down scenarios. 2) What would be replicating portfolio of bonds and stocks that could generate the same payoff of option? 3) Using the price of the portfolio of question (2), what would be the price of the put option? 4) Calculate the risk neutral probabilities, and Qd for stock A 5) Using the risk neutral probabilities, calculate the put option price