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7) complete this question. a) b) c) d) Suppose SSH Inc. is currently $12 per share and will go either up to $16 or down

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7) complete this question. a) b) c) d) Suppose SSH Inc. is currently $12 per share and will go either up to $16 or down to $10. Suppose the risk-free interest rate is 3%. We are interested in finding the price of a put option. What is the hedge ratio using the binomial model? What is the price of a put option using the binomial model? Using put-call parity what is the price of a call option? Re-do parts a) and b) except for call options instead of put options. Does your answer match what you found in part c)? If the risk-free rate were to decrease, all else the same how would that affect the price of the put options? All else the same, how would a decrease in the risk-free rate affect the price of call options? e) 7) complete this question. a) b) c) d) Suppose SSH Inc. is currently $12 per share and will go either up to $16 or down to $10. Suppose the risk-free interest rate is 3%. We are interested in finding the price of a put option. What is the hedge ratio using the binomial model? What is the price of a put option using the binomial model? Using put-call parity what is the price of a call option? Re-do parts a) and b) except for call options instead of put options. Does your answer match what you found in part c)? If the risk-free rate were to decrease, all else the same how would that affect the price of the put options? All else the same, how would a decrease in the risk-free rate affect the price of call options? e)

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