What is the hedge ratio of the put option

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Reference no: EM13267042

Consider a six month put option on a stock with a strike price of $32. The current stock price is $30 and over the next six months it is expected to rise to $36 or fall to $27. The risk free rate is 6%.

a)What is the risk neutral probability p?

b)What is the hedge ratio of the put option?

Show work please

c)What is the put price?

Reference no: EM13267042

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