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, uso $115 (up state) and dso = $71 (down state). a. What would be the call option hedge ratio for each of the following exercise prices: $115, $100, $85, $71, given the possible end-of- year stock prices, uso $115 (up state) and do = $ 71 (down state)? (Round your answers to 3 decimal places.) Exercise Price Hedge Ratio $ 115 100 $ $ $ 85 71 b. What do you conclude about the hedge ratio as the option becomes progressively more in the money? O Increases to a maximum of 1.0 Decreases to a minimum of O