Question $10$

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You currently have a position on an insurance put. An insurance put is a combination of a long stock and a long put on the same stock. You purchased the stock at the price of $$40$ and the put at the premium of $$2.$ The put option has an exercise price of $$40.$If the stock price decreases to $$38,$ what is your net income?

Select one:

a$.$ $$2$

b$.$ $$4$

c$.$ $$5$

d$.$ $$-3$

e$.$ $$-2$