Difference between replicating and hedging a portfolio

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A portfolio of derivatives (calls) on a stock has delta of 2400 and a gamma of -100.

a) What position in the stock would create a delta neutral portfolio?

b) A call option on the stock with a delta of 0.6 and a gamma of 0.04 can be traded. What position in the option and the stock creates a portfolio that is both gamma and delta neutral?

c) What is the main difference between replicating and hedging a portfolio?

Reference no: EM132730259

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