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ABC STOCK

The current price of ABC stock is $30 . During the next year the stock price can either go up by 30 %, or go down by 20% . There is a put option on ABC stock with 1-year time to expiration and with an exercise price of $27. The risk free rate is 10% . You are going to calculate the current price of the put option using the hedge portfolio method . In order to form a riskless portfolio you should buy 1 put option and how many shares of the ABC stock ?

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