a Set up a perfect hedge and compute the put options value Let the put have the same strike price K $105 b What is the hedge ratio What does it signify ...

a The puts values at expiration are p U max105 1207739 0 0 p D max105 894715 0 155285 for stock ...

a. Set up a perfect hedge and compute the put options value. Let the put have the

Question:

a. Set up a perfect hedge and compute the put option’s value. Let the put have the same K = $105.
b. What is the hedge ratio? What does it signify?
Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.