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Business, 30.11.2019 02:31 shyyyy13

Reconsider the determination of the hedge ratio in the two-state model (see page 730), where we showed that one-third share of stock would hedge one option. what would be the hedge ratio for the following exercise prices: 120, 110, 100, 90? what do you conclude about the hedge ratio as the option becomes progressively more in the money?

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Reconsider the determination of the hedge ratio in the two-state model (see page 730), where we show...
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