Question: Please solve the right panel based on the information as shown above t=0 t=1 1:: 50:4 50:3 Pu=O.5 so-3 Pd=O.5 so-4 so-2 so-5 so-I Assume

Please solve the right panel based on the information as shown above

Pu=O.5 so-3 Pd=O.5 so-4 so-2 so-5 so-I Assume hedger takes hedge ratio

t=0 t=1 1:: 50:4 50:3

Pu=O.5 so-3 Pd=O.5 so-4 so-2 so-5 so-I Assume hedger takes hedge ratio as h* , i.e if the risk exposure is a long position of 100 units of spot commodity, to hedge the risk, hedger will short IOOh* futures underlying on that commodity. Please answer the questions in the right panel in analogy to the left panel, by filling the blanks in j) r) below

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