Required:

a$.$ Consider a call option if in a two$-$state model, a stock can take a price of $$120$ or $$90,$ what would be the hedge ratio for each of the following exercise prices: $$120,$$$110,$$$100,$$$90?$

Note: Leave no cells blank $-$ be certain to enter $"$O$"$ wherever required. Round your answers to $2$ decimal places.

$\backslash$table$[[x,$Hedge Ratio$],[$$$120,],[$$$110,],[$$$100,],[$$$90,]]$

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

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

Decreases to a minimum of $0$