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Now Extend the One-Period Binomial Model to a Two-Period World

Question 6

Multiple Choice

Now extend the one-period binomial model to a two-period world.Answer questions 16 through 18.
-What is the hedge ratio if the stock goes down one period?


A) 0.00
B) 0.0725
C) 1.00
D) 0.73
E) none of the above

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