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a. If in a two-state model, a stock can take a price of 132 or 99, what would be the hedge ratio for each of

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a. If in a two-state model, a stock can take a price of 132 or 99, what would be the hedge ratio for each of the folowing prices: S132 SI 25 SI 15 $99 places.) Hedge Ratio $132 $125 $115 $99 b. What do you conclude about the hedge ratio as the option becomes progressively more in the money? O Increases to a maximum of 1.0 O Decreases to a minimum of 0

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