Consider 2 stocks S1 and S2. Assume that their current prices are S1(0) = 60 and S2(0) = 100. After

Consider 2 stocks S1 and S2. Assume that their current prices are S1(0) = 60 and S2(0) = 100. After one period there are three scenarios and the price change as follows. Also suppose that the 1-period effective rate is 0.05. Replicate a call option on S1 with K = 60 and T = 1.Consider I stacks S, And S,. Assume that their current prices are Silly = I’ll AndStill = I’m. After one period there Are & summarize fill the price change a` followsSamu I Silly = 15 5, 1 1 1 = 110San 2 5 /1 1 = 1′ S,[1] = 1015Also suggest that the I- purina effective rate is 1.15. Replicate A call option on S, with“ = I’M And ] = ].