You sell a European option with maturity T=3years, strike 30, and an underlying asset with current value 33. The risk-free yearly interest rate is 2%. The asset can go up or down each year by 50%.

a) Describe the detailed replicating strategy in the case that stock goes down in the first year, goes up in the second year, the goes up in the third year.

b) Find the value of a portfolio containing two Call options in short position, one Put option in long position and one stock (underlying asset) in long position

I think underlying asset means the initial stock.