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You are trying to price a put option using the binomial model. The current stock...

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Finance

You are trying to price a put option using the binomial model. The current stock price is $100, the exercise price is $110, and the risk-free rate is 10%. The two possibilities for ST are 130 and 80. a. What is the hedge ratio of the put? (Round your answer to 1 decimal place. Negative value should be indicated by a minus sign.) b. Form a portfolio of three shares of stock and five puts. What is the (nonrandom) payoff to this portfolio?

c. What is the present value of the portfolio? (Round your answer to 2 decimal places.)

d. Calculate the put value. (Round your answer to 2 decimal places.)

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