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4 1 point Suppose an investor purchases a Treasury bond priced at...

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Accounting

4
1 point
Suppose an investor purchases a Treasury bond priced at $100 and wants protection against a rise in yields. The investor purchases a put option on the bond for $1, which has a strike price of $98. If yields subsequently rise and lower the price of the bond to $90, what is the investor's dollar loss given her position in the put option, and what is the investor's dollar loss without the put option?
-$3;-$8
-$5;-$10
-$3;-$10
-$5;-$8
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