The current stock price is 100 and in the good state of the world it will be 120 and in a bad state of the world is 80 in 3 months. The risk-free rate is 3%. Assume you issue an instrument that pays 6 if the price of your equity greater than 100 and pays 3 if the price is less than 100$.

1. What will be the payoff of this instrument in the good and bad states of the world?
2. What is going to be a replicating portfolio (payoff is different)
3. What is the value of this instrument using a replicating portfolio?