plz write neatly and circle u answer only answer to red!!! Don't just copy other Chegg answer!!!

(1 point) This problem establishes a relationship between cash-or-nothing call option values and cash-or-nothing put option values, sometimes called cash-or-nothing put-call parity". The discount factor for the period t = 0 tot =T is dor, and we assume an ideal bank which pays interest on deposits and will make loans at the rate corresponding to this discount factor. An asset has value So at t = 0, and will have unknown value Sy at time T. At time t = 0, you construct a portfolio consisting of one cash-or-nothing call option and one cash-or-nothing put option on this asset, both options with the same strike and expiration. A cash-or-nothing call option with strike based on the asset is selling for Co and will pay (at t =T) Cr = 1 if S >K Cr = if S = K Cr=0 if S K Prif SyK Py = 1 if sr K you exercise the call option but not the put option and receive (2) 1 If Sr > Kyou exercise both the call option and the put option and receive (3) 1 If Sr dur, an arbitrage may be constructed by shorting the portfolio, depositing dyr in the bank and pocketing (Co + Po) - dyr At time Twithdraw the amount 1 from the bank and use this amount to reacquire the portfolio for Cr+Pr=1, then return the portfolio to the owner. If the value of the portfolio at t = 0 obeys Co +Po dor, an arbitrage may be constructed by borrowing do,r from the bank, purchasing the portfolio for Co + P, and pocketing der - (Co + Po). At time T sell the portfolio for Cr + Pr=1 and use this amount 1 to repay the bank. By the no arbitrage principle, we conclude that (7) Co + Po=