Required:

a$.$ Consider a call option if in a two$-$state model, a stock can take a price of $$164$ or $$123,$ what would be the hedge ratio for each of the following exercise prices: $$164,$$$155,$$$145,$$$123?($Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Round your answers to $2$ decimal places.$)$

$\backslash$table$[[x,$Hedge Ratio$],[$$$,164,],[$$$,155,],[$$$,145,],[$$$,123,]]$

b$.$ What do you conclude about the hedge ratio as the option becomes progressively more in the money?

$$ Increases to a maximum of $1\mathrm{.}0$

$$ Decreases to a minimum of $0$