A 100 par value bond maturing in 13 years and 3 months pays a 5% coupon and is priced at 100. A put option on the bond expiring in 3 months has a strike price of $98 and a premium of $1.50. What is the maximum loss using a long put strategy (buying the put option)? What is the long put strategy's profit or loss when the bond's yield is 5.30%? What is the difference in profit or loss between buying the put option and shorting the bond when the bond is yielding 4%? Is a short put strategy (selling the put option) profitable when the bond is yielding 5.30%?

Solve the following problem in Excel. Show all work.