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QUESTION
You are managing a $25 million stock portfolio with a beta of 1.2, which you decide to hedge by buying index put options with a contract value of...
You are managing a $25 million stock portfolio with a beta of 1.2, which you decide to hedge by buying index put options with a contract value of $150,000 and a delta of -0.40. How many option contracts are required to hedge this portfolio? Show your work.
