Consider a binomial world in which the current stock price of 80 can either go up by 10 percent or down by 8 percent.The risk-free rate is 4 percent.Assume a one-period world.Answer questions 12 through 15 about a call with an exercise price of 80.
-What is the hedge ratio?
A)0.429
B)0.714
C)0.571
D)0.823
E)none of the above

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The Answer of Consider a binomial world in which the current stock price of 80 can either go up by 10 percent or down by 8 percent.The risk-free rate is 4 percent.Assume a one-period world.Answer questions 12 through 15 about a call with an exercise price of 80.
-What is the hedge ratio?
A)0.429
B)0.714
C)0.571
D)0.823
E)none of the above

Consider a Binomial World in Which the Current Stock Price