In a one-period binomial model with h = 1, the current price of a non-dividend paying stock is 50,u= 1.2, d = 0.8, and the continuous interest rate is 2%. Consider a call

option on the stock with strike K= 50. What position in the stock (i.e. long or short and how many) is there in a replicating portfolio of this call option?

In a nnepelind hineniiel model with h = 1, the current price at e nundividend paying stock is 5D, 1: = 1.2, d = ILLS, and the continuous interest rate is 2%. Cnnsider a cell nptinn en the stock with strike K = 5t}. Wt pnsitien in the stack {i.e. leng er shnrt and hnw many} is there in n replicating pertfniio of this cell optinn'