Assume there are four default-free bonds with the following prices and future cash flows: Cash Flows Bond

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Assume there are four default-free bonds with the following prices and future cash flows:

Cash Flows Bond Price Today Year 1 Year 2 Year 3 A $934.15 1000 0 0 B 879.84 0 1000 0 C 1130.84 100 100 1100 D 830.72 0 0 1000 Do these bonds present an arbitrage opportunity? If so, how would you take advantage of this opportunity? If not, why not?

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Corporate Finance The Core

ISBN: 9781292431611

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Jul 31, 2024 08:02 AM

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Assume there are four default-free bonds with the following prices and future cash flows: Cash Flows Bond

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Corporate Finance The Core

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