1. If we invest $1 in a 2-year zero-coupon bond; 2. If we invest $1 in a 1-year zero-coupon bond, and at the end of year 1, roll over to a new 1-year zero-coupon bond In expectation, the return from these two strategies should be the same because of the No- arbitrage Principle. If the 2-year zero-coupon bond is priced at 90.70, the 1-year zero-coupon bond is priced at 96.15, and the one-year into one-year rate (f1,1") is 5%. Is there a violation of the No-Arbitrage Principle? If your answer is no, please explain why. If your answer is yes, please show how you could profit from this. Please turn in you answer by next Monday's class (02/24). Either email or hard copy is acceptable