We will derive a two-state call option value in this problem. Data: 5o = $100; X = $110; 1 + r = 1.10. The two possibilities for sy are $130 and $80. The portfolio consists of 2 shares of stock and 5 calls short. Required: a. The range of Sis $50 while that of Cis $20 across the two states. What is the hedge ratio of the call? (Round your answer to 2 decimal places.) Hedge ratio 0.40 X 2 decimal places required. b. Calculate the value of a call option on the stock with an exercise price of $110. (Do not use continuous compounding to calculate the present value of Xin this example, because the interest rate is quoted as an effective per-period rate.) (Do not round intermediate calculations. Round your answer to 2 decimal places.) Call value $ 17.14