Question: Use the two - state put - option value in this problem. SO = $ 1 0 0 ; X = $ 1 2 0

Use the two-state put-option value in this problem. SO = $100; X = $120; the two possibilities for ST are $150 and $80. The range of P across the two states is _____, and the hedge ratio is _______.
Multiple Choice
$0 and $40; 4/7
$0 and $50; +4/7
$0 and $40; +4/7
$0 and $50; 4/7
$20 and $40; +1/2

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