8. The stock now sells at $100, and the price will either increase by a factor...
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8. The stock now sells at $100, and the price will either increase by a factor of u = 1.3 or fall by a factor of d = .8 by year-end. Suppose the desired call options with X = 115 were traded. What would be the hedge ratio for the option? A. -0.45 B. -0.25 C. 0.30 D. 0.60 8. The stock now sells at $100, and the price will either increase by a factor of u = 1.3 or fall by a factor of d = .8 by year-end. Suppose the desired call options with X = 115 were traded. What would be the hedge ratio for the option? A. -0.45 B. -0.25 C. 0.30 D. 0.60
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