We consider two European put options, both on XYZ stock and both expiring at the same "time T ". With our usual notation, a price relationship (which is not in our list) is as follows: 4p(0,T,30)3p(0,T,40). Now suppose you observe the following prices as in the table below. The continuously compounded-interest rate (using a 365 day year) is 3%. (Actually, this is not needed, except if you wish to move money between time 0 and time T.) Demonstrate how one can obtain arbitrage profits. Signs: We consider two European put options, both on XYZ stock and both expiring at the same "time T ". With our usual notation, a price relationship (which is not in our list) is as follows: 4p(0,T,30)3p(0,T,40). Now suppose you observe the following prices as in the table below. The continuously compounded-interest rate (using a 365 day year) is 3%. (Actually, this is not needed, except if you wish to move money between time 0 and time T.) Demonstrate how one can obtain arbitrage profits. Signs