Required:

a$.$ Consider a call option if in a two$-$state model, a stock can take a price of $$184$ or $$138,$ what would be the hedge ratio for each of the following exercise prices: $$184,$ $$180,$ $$170,$ $$138?($Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Round your answers to $2$ decimal places.$)$

b$.$ What do you conclude about the hedge ratio as the option becomes progressively more in the money?

multiple choice

Increases to a maximum of $1\mathrm{.}0$

Decreases to a minimum of $0$