A FinCorp put option with strike price 60 trading on the Acme options exchange sells for $2.

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A FinCorp put option with strike price 60 trading on the Acme options exchange sells for $2.

To your amazement, a FinCorp put with the same expiration selling on the Apex options exchange but with strike price 62 also sells for $2. If you plan to hold the options positions to expiration, devise a zero-net-investment arbitrage strategy to exploit the pricing anomaly. Draw the profit diagram at expiration for your position. P-639

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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