Calculate the value of a call option using the binomial model. Data: S0 = 100; X = 110; 1 + r = 1.10. The two possibilities for ST are 130 and 80.

(a)

What is the hedge ratio of the call?

(b)

Calculate the value of a call option on the stock with an exercise price of 110. (Do not use continuous compounding to calculate the present value of X in this example=r, because the interest rate is quoted as an effective per period rate. In other words, use standard discount formula: PV=FV/(1+r) (Round your answer to 2 decimal places. Omit the "$" sign in your response.)