Reconsider the determination of the hedge ratio in the two-state model where we showed that one-third share of stock would hedge one option. The possible end-of-year stock prices, use = $90 (up state) and dsg = $41 (down state). Required: a. What would be the call option hedge ratio for each of the following exercise prices: $90, $76, $59, $41, given the possible end-of- year stock prices, use = $90 (up state) and dSe = $41 (down state)? b. What do you conclude about the hedge ratio as the option becomes progressively more in the money? Required A Required B What would be the call option hedge ratio for each of the following exercise prices: $90, $76, $59, $41, given the possible end-of-year stock prices, us = $90 (up state) and ds = $41 (down state)? Note: Round your answers to 3 decimal places. Exercise Price Hedge Ratio $ 90 $ 76 69 $ 59 $ 41 Required A Required B What do you conclude about the hedge ratio as the option becomes progressively more in the money? Conclusion A Required B Decreases to a minimum of 0 Increases to a maximum of 1.0