Using the binomial call option model to find the current value of a call option with a $25 exercise price on a stock currently priced at $26. Assume the option expires at the end of two periods, the riskless interest rate is ½ percent per period. What are the hedge ratios

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A: Present value of annuity due = Present value of Ordinary annuity *(1+ Interest rate)

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A:

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A: Hi, since you have posted a question with multiple sub-parts, we will answer the first three as per…