Question: A call option will be worth either $ 1 7 or $ 8 one period from now and the call's underlying asset will be worth
A call option will be worth either $ or $ one period from now and the call's underlying asset will be worth either $ or $ You already own shares of the stock. How many call options do you need to trade in order to hedge the risk of the stock for the next period? Write a positive number to buy the calls and a negative number to sell them. Round your answer to the nearest whole number and assume for simplicity that one call corresponds to one share of the stock.
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