QUESTION 4 Suppose the current stock price is 60 pounds and in the next period the price will go up by P = 15 percent or go down by q = 5 percent. Assume that the risk-free interest rate is 5 percent. Consider a Put Option that expirse in one period and has a strike (exercise) price of 60 pounds. Denote the stock price at t= 1 by Su if the stock price goes up and by Sa if the stock price goes down. we can illustrate this scenario as folllows: t=0 t=1 S. SO Sa Find the arbitrage-free price of the put option at t=0 by constructing a replicating portfolio consisting of stocks and money. (Hint: Find the right numbers for stock and money in this portfolio and finally calculate the cost of this portfolio.) Calculate your answer and round it to two decimal places and type it in the box below the answer has to be submitted in the format D.DD so it looks like e.g. 0.67, 0.80.1.75, or 2.00)