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3. A large rm that is near bankruptcy comes to you asking for a very large loan, in the hopes that the cash will save
3. A large rm that is near bankruptcy comes to you asking for a very large loan, in the hopes that the cash will save its business. If the rm goes bankrupt, you will be one of the rst to receive payouts from the liquidation of the company. Describe how making this loan is like buying an option. What is the underlying asset, premium, and strike price
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