Draw the profit diagram at maturity for position


A Ford put option with strike price 60 trading on the Acme options exchange sells for $2. To your amazement, a Ford 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 maturity, devise a zero-net-investment arbitrage strategy to exploit the pricing anomaly. Draw the profit diagram at maturity for your position.

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Finance Basics: Draw the profit diagram at maturity for position
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