Question: We will derive a two-state put option value in this problem. Data. So-150; X-160; 1 + r= 1.1. The two possibilities for ST are 80

We will derive a two-state put option value in this problem. Data. So-150; X-160; 1 + r= 1.1. The two possibilities for ST are 80 and 100. a. The range of S is 80 while that of Pis 60 across the two states. What is the hedge ratio of the put? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Hedge ratio b-1. Form a portfolio of 3 shares of stock and 4 puts. What is the (nonrandom) payoff to this portfolio? (Round your answer to 2 decimal places.) Nonrandom payoff b-2. What is the present value of the portfolio? (Round your answer to 2 decimal places.) Present value c. Given that the stock currently is selling at 150, calculate the put value. (Round your answer to 2 decimal places.) Put value

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