As discussed in class, twin shares are distinct shares that are claims to the same cash flow stream. One such pair is Royal Dutch Petroleum and Shell Transport. The stock of the former is a claim to 60% of the total cash flow from the combined firm while the stock of the latter is a claim to 40%. Suppose the stock price of Shell Transport is $50 and that of Royal Dutch Petroleum is $60. 

a) Is there an arbitrage opportunity? Describe the strategy if so. 

b) What risk does the arbitrageur face in this strategy? Explain briefly