4) Consider a European call option on a stock market index on June 15, 2021. Note: We are taking dividends as being paid continuously. In the Black-Scholes model for options on stocks paying a continuous dividend, C=Sexp(t)N(d1)Kexp(Rt)N(d2)P=Kexp(Rt)[1N(d2)]Sexp(t)[1N(d1)] In this example, N(d1)=0.6066 N(d2)=0.5738 exp(Rt)=0.999753 exp(t)=0.995081 Suppose you purchase a call option. Explain how you would hedge this position, i.e., state what you would buy and what you would sell and in what quantities when using ETFs on the index (think of these as shares of the ETF) (or index futures contracts as hedge instruments). (Note: No complex calculations are necessary) Explain without calculations how the hedge can be carried out using S\&P 500 futures contracts. 4) Consider a European call option on a stock market index on June 15, 2021. Note: We are taking dividends as being paid continuously. In the Black-Scholes model for options on stocks paying a continuous dividend, C=Sexp(t)N(d1)Kexp(Rt)N(d2)P=Kexp(Rt)[1N(d2)]Sexp(t)[1N(d1)] In this example, N(d1)=0.6066 N(d2)=0.5738 exp(Rt)=0.999753 exp(t)=0.995081 Suppose you purchase a call option. Explain how you would hedge this position, i.e., state what you would buy and what you would sell and in what quantities when using ETFs on the index (think of these as shares of the ETF) (or index futures contracts as hedge instruments). (Note: No complex calculations are necessary) Explain without calculations how the hedge can be carried out using S\&P 500 futures contracts