Question
The interest rate is 2% per year. The stock price of ILW is currently $88 and it pays no dividends. The stock price a year
The interest rate is 2% per year. The stock price of ILW is currently $88 and it pays no dividends. The stock price a year from now will either be $100 or $68. You sell your client a call option on ILW with a strike price of $92 and an expiration date 1 year from now. What is the hedge ratio of this call option?
| 0.21 | ||
| 0.28 | ||
| 0.37 | ||
| 0.57 | ||
| None of the above |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Trade Union Finance
Authors: Marick F. Masters, Raymond Gibney
1st Edition
1032371382, 978-1032371382
