Question: We will use the binomial option pricing model to value the following put option. Data: So-170 X-180:1 + r= 1.1. The two possibilities for ST

We will use the binomial option pricing model to value the

We will use the binomial option pricing model to value the following put option. Data: So-170 X-180:1 + r= 1.1. The two possibilities for ST are 210 and 90 a. The range of S is 120 while that of P is 90 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 sure payoff to this portfolio? (Round your answer to 2 decimal places.) Sure payoff S b-2. What is the present value of the portfolio's payoff? (Round your answer to 2 decimal places.) Present value c. Given that the stock currently is selling at 170, calculate the put value. (Round your answer to 2 decimal places.) Put value S

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