Chapter 15, Problem 24PS

A put option with strike price $\text{3}00$ on the Acme options exchange sells for $\$\text{2}$ . To your amazement, a put on the firm with the same expiration selling on the Apex options exchange but with strike price $\$\text{62}$ also sells for $\$\text{2}$ . If you plan to hold the options position until expiration, devise a zero-net-investment arbitrage strategy to exploit the pricing anomaly. Draw the profit diagram at expiration for your position. $\left(\text{LO 15}-\text{1}\right)$