5. IBM stock currently sells for 70 dollars per share. The implied volatility equals 35. 0. The risk-free rate of interest is 8. 5 percent continuously compounded. If you owned a 100 shares of IBM stock with strike price 67 and maturity 8 months, how many call options would you have to buy (sell) to create a delta-neutral hedge? Assume each option controls one share of IBM stock?

Trade will take place: a. if the maximum that a consumer is willing and able to pay is less than the minimum price the producer is willing and able to accept for a good. b. if the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good. c. only if the maximum that a consumer is willing and able to pay is equal to the minimum price the producer is willing and able to accept for a good. d. none of the above.