Assuming a stock price of $154, what would be the hedge ratio for each of the following exercise prices: $154, $132, $110, $99? (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places.)

X		Hedge Ratio
$	154
$	132
$	110
$	99

You would like to be holding a protective put position on the stock of XYZ Co. to lock in a guaranteed minimum value of 190 at year-end. XYZ currently sells for 190. Over the next year, the stock price will either increase by 8% or decrease by 8%. The T-bill rate is 3%. Unfortunately, no put options are traded on XYZ Co.

a.	How much would it cost to purchase if the desired put option were traded? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Cost to purchase

$

b.	What would be the cost of the protective put portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Cost of the protective put portfolio

We will derive a two-state call option value in this problem. Data: S₀ = 300; X = 310; 1 + r = 1.1. The two possibilities for S_T are 350 and 150.

a. The range of S is 200 while that of C is 40 across the two states. What is the hedge ratio of the call? (Round your answer to 2 decimal places.)

Hedge ratio

b. Calculate the value of a call option on the stock with an exercise price of 310. (Do not use continuous compounding to calculate the present value of X in this example, because the interest rate is quoted as an effective per-period rate.)