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We buy a convertible bond for $ 8 0 0 when the underlying stock price is $ 3 0 and the straight value of the

We buy a convertible bond for $

800

when the underlying stock price is $

30

and the straight value of the bond is $

700 .

If the stock price drops to $

0.1,

what the maximum loss that the buyer of the convertible bond may incur?

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