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  3. suppose the stock price today is $50, in year time

Suppose the stock price today is $50, in year time the stock price goes up...

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Finance

  1. Suppose the stock price today is $50, in year time the stock price goes up to $77.65 and goes down to $48.47, dollar rate of return in one year is 1.0513.
    1. Set up a perfect hedge and compute the put options value using the synthetic approach. Let the put have the same strike price K =$65.

  1. What is the hedge ratio? What does it signify? Please show all the steps with formula

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