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Business, 04.07.2020 18:01 adejumoayobami1

You would like to hold a protective put position on the stock of Ximera Corp to lock in a guaranteed minimum value of $50 at year-end. Ximera currently sells for $50. Over the next year. Ximera's stock price will increase by 10% or decrease by 10%. The T-bill rate is 5%. Unfortunately, no put options are traded on Ximera Corp. Suppose the desired put options with X = 50 were traded. What would be the hedge ratio for the option? Multiple Choice
A. 1
B. -1
C. -0.5
D. 0.5

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