Consider an American put option written on a stock when:

the current stock price is $30.00. the exercise price is $40.00. the volatility is 30% p.a. the risk-free rate of interest (continuous compounding) is 5% p.a. the time to expiry is 6 months.

Assume that no dividends are expected to be paid on the underlying stock for this part. Create a replicating portfolio for the American put option consisting of an investment in the underlying stock and the risk-free asset for the first three-month period. In other words, describe how one can form the portfolio made of the underlying stock and the risk-free asset now (month 0) so that the portfolio will lead to the exact same investment outcome in three months (at the end of month 3) as buying and holding one American put option described above.