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You currently have a portfolio worth $100,000. Suppose an at-the-money put option has a delta of -0.4. Suppose value of the portfolio drops by 6%.

You currently have a portfolio worth $100,000.

Suppose an at-the-money put option has a delta of -0.4.

Suppose value of the portfolio drops by 6%.

What is the total loss of the portfolio if you were able to use the put?

If the put didnt exist, how could you replicate this outcome?

Show your work.

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