Question: Data: S 0 = 102; X = 116; 1 + r = 1.08. The two possibilities for S T are 150 and 82. a. The

Data: S₀ = 102; X = 116; 1 + r = 1.08. The two possibilities for S_T are 150 and 82.

a. The range of S is 68 while that of P is 34 across the two states. What is the hedge ratio of the put? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.)

hedge ratio:

b. Form a portfolio of one share of stock and two puts. What is the (nonrandom) payoff to this portfolio?

nonrandom payoff

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

present value

d. Given that the stock currently is selling at 102, calculate the put value. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

put value

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