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Open Ended Questions (Show Calculations to Get Any Credit) Q2. The following information is given about options on the stock of a certain company. (50
Open Ended Questions (Show Calculations to Get Any Credit) Q2. The following information is given about options on the stock of a certain company. (50 points) So - 30 Te = 0.09 62 -0.45 X - 29 T-0.75 No dividends are expected. Answer the following questions:. c. How do you construct a riskless hedge, and calculate the number of calls per 100 shares purchased? Explain (5 points) d. What is the call's vega? Explain the meaning of your answer. (5 points) e. If we now assume that the stock pays a dividend at a known constant rate of 2.0 percent, what stock price should we use in the model? (5 points)
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