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An eight-month European put option on a dividend-paying stock is currently selling for $5. The stock price is $33, the strike price is $35, and

An eight-month European put option on a dividend-paying stock is currently selling for $5. The stock price is $33, the strike price is $35, and the risk-free interest rate is 9% per annum. The stock is expected to pay a dividend of $3 two months later and another dividend of $3 five months later. Explain the arbitrage opportunities available to the arbitrageur by clearly demonstrating what would happen under different scenarios.

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