Assume a volatility of 25%. What is going to be the hedging ratio for a replicating portfolio for an option that pays $1

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answerhappygod
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Assume a volatility of 25%. What is going to be the hedging ratio for a replicating portfolio for an option that pays $1

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Assume a volatility of 25%. What is going to be the hedging
ratio for a replicating portfolio for an option that pays $1$ in
thw case of good state of the world and $0$ in the bas state of the
world. Assume the option expires in half a year and the current
stock price is 20$ ( Hint: form the replicating portfolio and calc
the alpha for this payoff ) PLEASE ANSWER ASAP WILL GIVE POSITIVE
RATING!
0.07
0.14
0.25
NONE OF THE ABOVE
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