The stock price of X is currently $85. A 6-month call option with a strike price of $92.50 written on X stock is currently selling for $7.50. The risk-free interest rate is 5% p.a. (continuous compound).

Answer the following questions:

i. Suppose that puts on X are not traded. Show in detail how to replicate the payoff of a put option.

ii. Suppose that the puts are traded. Calculate the price of a 3-month put option with a strike price of $70.