D Question 3 20 pts b. The current price of share of Stock Z is $100. The binomial model for this stock suggests that the price next year will be either 50% higher or 33% lower.e. either $150 or $67). The annual risk-free rate is 7%. The stock does not pay dividends. 3. What is the hedge ratio for a one-year call option on Stock Z. The call option has an exercise (strike) price of $80? If you have bought 1000 of the calls in part a then how many shares of Stock Z will you need to either buy or sell short to create a risk-free portfolio? Specify whether you will buy share or short shares. If you have bought 1000 of the calls in part a then how many one-year put options on Stock 2, with an exercise (strike) price of sao, will you need to elther buy or sell to create a risk-free portfolio? Specify whether you will buy or sell the put options d. Calculate the current value of the one-year call option on Stock Zwith exercise (strike) price of $80. c. Edit View Insert Format Tools Table 12pt Paragraph B I U ALT! 9