You are given:

(i) The current price of a stock is $65.

(ii) One year from now the stock will sell for either $60 or $70.

(iii) The stock pays dividends continuously at a rate proportional to its price. The dividend yield is 4%.

(iv) The continuously compounded risk-free interest rate is 6%.

(v) The current price of a one-year 65-75 European put bear spread on the above stock is $6.50.

Describe transactions (i.e., what to buy/sell/borrow/lend) that one should enter into to exploit an arbitrage opportunity (if one exists). Show your work.