You are a hedge fund trader specializing in the pharmaceutical industry. Your models indicate that the stock of Merck $($NYSE: MRK$)$ is currently undervalued. You implement a long$/$short arbitrage strategy to profit from this mispricing. You go long MRK$,$ and as a hedge, you go short their closest competitor, Pfizer Inc. $($NYSE: PFE$).$ Which of the following scenarios represents a source of fundamental risk to this arbitrage strategy?

the US Supreme Court approves shareholder lawsuits against MRK$,$ related to its Vioxx drug

traders who think MRK is overvalued continue to sell it$,$ driving down its price

you are unable to find any shares of PFE to short

the pharmaceutical industry as a whole suffers massive losses due to changes in health care law