We will derive a two-state call option value in this problem. Data: 5o = $160; X = $170; 1 + r= 1.10. The two possibilities for sy are $190 and $110. The portfolio consists of 1 share of stock and 4 calls short. Required: a. The range of Sis $80 while that of C is $20 across the two states. What is the hedge ratio of the call? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Hedge ratio 0.75 X b. Calculate the value of a call option on the stock with an exercise price of $170. (Do not use continuous compounding to calculate the present value of X in this example, because the interest rate is quoted as an effective per-period rate.) (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Call value $ 570.00 X