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Roxxon Inc. stock is currently selling for $84.56 per share. Options permit the holder to buy one share at an exercise price of $45.00. These

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Roxxon Inc. stock is currently selling for $84.56 per share. Options permit the holder to buy one share at an exercise price of $45.00. These options will expire at the end of one year. When the option expires, Roxxon Inc.'s stock will either be selling for $65.00 or $25.00. The range of Roxxon Inc.'s ending stock prices is In contrast, the range of Roxxon Inc.'s ending option payoffs is To construct a hedged portfolio, the investor's goal is to have the portfolio payoff be the same if the stock goes up or down. Suppose Karine is planning on writing one call option, how many shares of stock should she buy to set up the hedge? O 0.55 shares O 0.30 shares O 0.35 shares O 0.45 shares O 0.50 shares If the investor decides to go forward with creating this riskless hedge, the net payoff will be What will be the equilibrium price of the call option if the risk-free rate is 9%? O $24.65 O $30.81 O $23.11 O $27.73 O $29.27

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