Exercise 2. (No picking specific numbers) Recall that the hedge ratio for a European call option is given by = Cu - Cd H uSo dS. Characterize the behavior of the hedge ratio in the limit as it gets farther in the money and as it gets farther out of the money, i.e., lim H =? lim H (1) So too So+0 (Hint: Note that Cu and Ca are really functions of the underlying stock price So.) Exercise 3. (Again no picking numbers) Consider a stock that pays no dividends on which a futures contract, a call option, and a put option trade. The maturity date for all three contracts is T, the strike price of both the put and the call is K, and the futures price is F. Prove that if K = F, then the price of the call option equals the price of the put option