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Find the Hedge Ratio for a Put Option on $15,000

Question 58

Multiple Choice

Find the hedge ratio for a put option on $15,000 with a strike price of €10,000. In one period the exchange rate (currently S($/€) = $1.50/€) can increase by 60% or decrease by 37.5% .


A) -15/49
B) 5/13
C) 3/2
D) 15/49

Correct Answer:

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