: $110 Security Market Price Today Weak Economy Strong Economy SO $250 $130 $250 SO a. What is the risk-free interest rate? b. Consider a risk-free security that has a payoff in one year of $2,750. 1. How many units of each of securities and 2 would be needed to replicate this risk-free Security? i. Based on part b.), what is the market price today of this risk-free security? L. Based on part a) what is the market price today of this risk-free security? c. Consider a security that has a payoff in one year of $2,750 if the economy is weak and $5,500 if the economy is strong 1. How many units of each of securities 1 and 2 would be needed to replicate this security? ii. Based on parte. what is the market price today of this security? d. Consider a security that has a payoff in one year of $5,500 f the economy is weak and $2,750 if the economy is strong I. How many units of each of securities 1 and 2 would be needed to replicate this security? I. Based on part d.), what is the market price today of this security? e. Explain the economic reasoning as to why the security in parte) has a lower price than the security in part d).