Suppose the risk-free interest rate per annum is r. Consider two portfolios: Portfolio A: consists of 1. a European call option of the AIA stock at strike price K, with an expiration date = 1 year 2. an amount of money $K/(1+r) in a risk-free savings account Portfolio B: consists of 1. a European put option of the AIA stock at strike price K, with an expiration date = 1 year 2. one share of the AIA stock There are two possible scenarios on the expiration date: "up" scenario: the price of the AIA stock SK "down" scenario: the price of the AIA stock SK (a) Compute the net worth of Portfolio A on the expiration date in the "up" as well as in the "down" scenario. (b) Compute the net worth of Portfolio B on the expiration date in the "up" as well as in the "down" scenario. (c) Based on (a) and (b), what is the relation between the fair present price of the European call options and the fair present price of the European put options? Suppose the risk-free interest rate per annum is r. Consider two portfolios: Portfolio A: consists of 1. a European call option of the AIA stock at strike price K, with an expiration date = 1 year 2. an amount of money $K/(1+r) in a risk-free savings account Portfolio B: consists of 1. a European put option of the AIA stock at strike price K, with an expiration date = 1 year 2. one share of the AIA stock There are two possible scenarios on the expiration date: "up" scenario: the price of the AIA stock SK "down" scenario: the price of the AIA stock SK (a) Compute the net worth of Portfolio A on the expiration date in the "up" as well as in the "down" scenario. (b) Compute the net worth of Portfolio B on the expiration date in the "up" as well as in the "down" scenario. (c) Based on (a) and (b), what is the relation between the fair present price of the European call options and the fair present price of the European put options