The current spot price of a stock is $78.00, the expected rate of return is 7.1%, and the volatility of the stock is 18%. The risk-free rate is 4.2%. Assume the log-normal model.

(a) Calculate the Delta of a portfolio containing 3 European calls and 4 European puts, each with the same strike $84.00 and expiring in 12 months.

(b) If the stock price drops suddenly by 18%, use part (a) to estimate the change in price.