Math Question 9: Consider a 2-year Asian arithmetic average…

Math Question 9: Consider a 2-year Asian arithmetic average strike put on a non-dividend paying stock whose current price is $50. Suppose that there are two time steps of 1 year, and in each time step the stock price either moves up by 20% or moves down by 20%.The annual continuously compounded risk-free interest rate is 5%. Find the price of the Asian arithmetic average strike put.Enter your answer in Dollars rounded to two decimal places.

Math Question 1: A market-maker sells option A for $10. This…

Math Question 1: A market-maker sells option A for $10. This option’s delta is 0.6557 and its gamma is 0.02. The market maker proceeds to delta-gamma hedge this commitment by trading in the underlying and also in option B on the same stock. The latter option’s price is $4.70, its delta is 0.5794 and its gamma is 0.04. What is the market-maker’s resulting position in the underlying stock?