http://www.pinggu.org/bbs/viewthread.php?tid=1046001&page=1&from^^uid=938102

now i have some questions regarding the above link's discussion .there is a example in mfe's manual.
for a non-dividend paying stock with price 21:
i:risk-free rate is 4%
ii: a euro 3-month put option on the stock with strike price 20 cost 1
iii: a euro 6-month put option on the stock with strike price 20.3 cost 0.9
you take advantage of arbitrage. assume that you sell one 3-month put option and follow the optimal strategy,and that the stock price is 19 after 3 months and 21 after 6 months.
determine your net profit after 6 month.
the answer for the example in maunal show us a cash flows figure.


who could explain the cash flow explicitly? it will be better if you reply to me with chinese...thanks a lot.
i want to know the cash value at 3 months time point, why i should pay 1 ?