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8 ( a ) A put option on Vauxhall shares is selling for the equivalent of 2 in the UK with an exercise price of
a A put option on Vauxhall shares is selling for the equivalent of in the UK with an exercise price of In France, the same option is selling for However, its exercise price is Show how you can use a pure arbitrage strategy that exploits this difference. Explain your strategy, draw the payoff diagram and explain what the payoffs are.
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