Why St=150, P=0?

St=80,p=40?

What's the function?

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_ Select one A. $0 and $50; +4/7 B. $0 and $40; -4/7 O C. $0 and $50; -4/7 D. $20 and $40; +1/2 o E. $0 and $40; +4/7 When St = $150; P = $0; when ST = $80: P = $40; ($0 - $40)/($150 - $80) =-4/7. When ST = $150; P = $0; when ST = $80: P = $40; ($0 - $40)/($150 - $80)=-4/7. The correct answer is: $0 and $40; -4/7