Suppose the stock price today is $50, in year time the stock price goes up...
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Finance
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.
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.
What is the hedge ratio? What does it signify? Please show all the steps with formula
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