Todays price of Microsoft (MSFT) is $100 per share. MSFT does not pay dividends. One year from today, there are two possible states. In the u state, the economy is booming and the price of MSFT is $150. In the d state, the economy is suffering and the price of MSFT is $50. The c.c. risk-free interest rate is zero percent. You are interested in a put option on MSFT with a strike of $100 and a maturity of one year. Assume there is no arbitrage.

a) How many shares of stock are in the replicating portfolio i.e., what is Delta? b) How many bonds are in the replicating portfolio i.e., what is Beta? c) What is the price of the put option?