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Draw the profit diagram at expiration

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Reference no: EM132491397

A FinCorp put option with strike price 60 trading on the Acme options exchange sells for $2. To your amazement, a FinCorp put with the same maturity selling on the Apex options exchange but with strike price 62 also sells for $2. If you plan to hold the options positions to expiration, devise a zero-net-investment arbitrage strategy to exploit the pricing anomaly. Draw the profit diagram at expiration for your position

Reference no: EM132491397

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