Question: Explain What Is Meant By The ‘‘delta’’ Of A Stock Option? What Is The Value Of The Delta For Each Step? Then, Get The Option Value By Using The Delta-hedged Portfolio. Finally, Get The European Put With The Same Strike And Time To Expiry By Using Put-Call Parity And, Based On This Stock, Consider An American Put Option With The Strike Price …

Explain what is meant by the ‘‘delta’’of a stock option? What is the value of the delta for each step?Then, get the option value by using the delta-hedged portfolio.Finally, get the European put with the same strike and time toexpiry by using Put-Call parity and, based on this stock, consideran American put option with the strike price is $42, the risk-freerate, the time to maturity, and time steps keep the same, what isthe premium of this option.