Calculate the hedge ratio of this put and interpret this, Financial Management

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Calculate the hedge ratio of this put and interpret this

a) A stock is currently selling for $100, the interest rate is 10% per annum with continuous compounding and there is a European put option on the stock with exercise price of $110. We are told that the price in one year can be either $130 or $50. i) Calculate the hedge ratio of this put and interpret this ratio and ii) Calculate the value of this put using the replicating portfolio method, clearly demonstrating the techniques used.

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Financial Management: Calculate the hedge ratio of this put and interpret this

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