Question: can you please show the work and solve this and explain why the answer is 40. Company XYZ is experiencing difficulty in obtaining funding. The

can you please show the work and solve this and explain why the answer is 40.

Company XYZ is experiencing difficulty in obtaining funding. The company is planning to issue PIPEs that will be restricted from trading on the public market for a year. The company's common stocks are currently traded at $100/ share. As a hedge fund manager, you can purchase the PIPEs at $60 /share. Assume that your long position in PIPEs is 1 shares. You also implement a hedging strategy that perfectly hedges the risk that company XYZ's common stock prices may decrease after one year. If the common stock price of company XYZ is $50 after one year, what is the profit/loss to your strategy? 10

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