1.

Suppose that JPMorgan Chase sells call options on $1.25 million worth of a stock portfolio with beta =1.5. The option delta is 0.8. It wishes to hedge its resultant exposure to a market advance by buying a market-index portfolio. Suppose it use market index puts to hedge its exposure. The index at current prices represents $2,000 worth of stock. a. How many dollars' worth of the market-index portfolio should it purchase? b. What is the delta of a put option? (Round your answer to 1 decimal place. Negative amount should be indicated by a minus sign.) b. What is the delta of a put option? (Round your answer to 1 decimal place. Negative amount should be indicated by a minus sign.) \begin{tabular}{l|r|} \hline & Answer is comple \\ \hline Delta & (0.2) \\ \hline \end{tabular} c. Complete the following: (Round your answer to 1 decimal place. Negative amount should be indicated by a minus sign.)