# Hedging a short position in the Lookback Option

SOLUTION

I got the correct answer using this formula

$$X_2(HH)=(1+r)*[X_1(H)-\Delta_1(H)*S_1(H)]+\Delta_1(H)*S_2(HH)$$

$$(1+0.25)[2.24-(.06667*8)]+0.06667*16=3.20$$