The current stock price of Gringotts Bank is $70, and the stock does not pay dividends. The risk-free rate of return is 6%. The standard deviation of Gringotts' stock is 40%. You want to purchase a put option on this stock with an exercise price of $75 and an expiration date 30 days from now (1 yr. = 365 days).

You are also given the following information regarding the cumulative probability function for a variable with a standard normal distribution:

Question: Based on BSM, in order to hedge your risk you should:

		hold 31 shares of stock per 100 put options
		short 96 shares of stock per 100 put options
		hold 69 shares of stock per 100 put options
		hold 54 shares of stock per 100 put options

N(x) 0.0944 -1.314 -0.0057 0.1061 0.5013 1.762 1.851 0.4977 0.5422 0.6919 0.961 0.968