Two years ago, a 5-year Treasury note was issued and so it has three years left until

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Two years ago, a 5-year Treasury note was issued and so it has three years left until maturity. A newly-issued 3-year Treasury note is trading at a higher price than the two-year-old 5-year note.

a. What strategy would you implement to exploit the mispricing?

b. Why might such a strategy be risky?

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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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Question Posted: Jul 31, 2024 08:01 AM

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Two years ago, a 5-year Treasury note was issued and so it has three years left until

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Principles Of Corporate Finance

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