We will derive a two-state put option value in this problem. Data: S0 = $170; X = $180; 1 + r = 1.10. The two possibilities for ST are $210 and $90. Required: a. The range of S is $120 while that of P is $90 across the two states.

What is the hedge ratio of the put? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

b. Form a portfolio of three shares of stock and four puts. What is the (nonrandom) payoff to this portfolio? (Round your answer to 2 decimal places.)

c. What is the present value of the portfolio? (Round your answer to 2 decimal places.)

d. Given that the stock currently is selling at $170, calculate the put value. (Do not round intermediate calculations and round your answer to 2 decimal places.)