"A European Put option with premium Pt(1)has an exercise price E1. A European put option on the same underlying stock with Premium Pt(2) has an...

"A European Put option with premium Pt(1)has an exercise price E1. A European put option on the same underlying stock with Premium Pt(2) has an exercise price E2. The option both expire at Time T and E2>E1 I f : Pt(2)-Pt(1) > Bt* (E2-E1) at some time t<T ,describe an arbirtage strategy and discuss the arbirtage profits. Recall that Bt is the tiem t price of 1 face value of a default free zero coupon bond that matures at Time T. "