You would like to set up a portfolio with the payoff structure at time T depicted in the figure below. The underlying stock is a non-dividend paying stock, and its current stock price is $23. The prevailing continuous compound risk-free rate is 5% per annum, and T = 1 year. Figure: Payoff Structure (in $) 10 20 30 40 ST -10 Payoff Suppose that except the shares of the underlying stock and the risk-free bonds, there are also six call options with strike prices X = $20, $21, $25 (all integer values from $20 to $25), and five put options with strike prices X = $26, $27, $30 (all integer values from $26 to $30) available in the market. All the option contracts are European style options which mature at time T and are written on the same underlying stock. Assume the time value of options are non-negative, and any of the securities can be bought or (short) sold. a). Clarify how you would set up the portfolio today to ensure the payoff structure at time T in the above figure, assuming that put-call parity holds for the options. You would like to set up a portfolio with the payoff structure at time T depicted in the figure below. The underlying stock is a non-dividend paying stock, and its current stock price is $23. The prevailing continuous compound risk-free rate is 5% per annum, and T = 1 year. Figure: Payoff Structure (in $) 10 20 30 40 ST -10 Payoff Suppose that except the shares of the underlying stock and the risk-free bonds, there are also six call options with strike prices X = $20, $21, $25 (all integer values from $20 to $25), and five put options with strike prices X = $26, $27, $30 (all integer values from $26 to $30) available in the market. All the option contracts are European style options which mature at time T and are written on the same underlying stock. Assume the time value of options are non-negative, and any of the securities can be bought or (short) sold. a). Clarify how you would set up the portfolio today to ensure the payoff structure at time T in the above figure, assuming that put-call parity holds for the options