1. Ms. Janita has $90,000 available to invest. She observes that r17, the interest rate on risk free incestments with a tem to maturity ot 17 years is 2.43% while the discomit factor for 18 years is 0.675. (i) Work Ouf DF 17 , the discount tustor for 7 years (ii) Work out r18, the interest rafe on risktree investments with a ferm to maturity of 18 years (iii) Deternine whether or not there are risk free arbptrage oppurtunities here. Give reasons. (iv) Set up an arbitrage table to show how you will realize arbitrage profits. (v) If the rates in the fwo markets were to remain unchanged, how many round trips would be necessary to make \$1 million? (vi) If the 18 year rate were to what lenel would the Pt year rate have to fall for the arbitrage oppurtunity to vanish? 1. Ms. Janita has $90,000 available to invest. She observes that r17, the interest rate on risk free incestments with a tem to maturity ot 17 years is 2.43% while the discomit factor for 18 years is 0.675. (i) Work Ouf DF 17 , the discount tustor for 7 years (ii) Work out r18, the interest rafe on risktree investments with a ferm to maturity of 18 years (iii) Deternine whether or not there are risk free arbptrage oppurtunities here. Give reasons. (iv) Set up an arbitrage table to show how you will realize arbitrage profits. (v) If the rates in the fwo markets were to remain unchanged, how many round trips would be necessary to make \$1 million? (vi) If the 18 year rate were to what lenel would the Pt year rate have to fall for the arbitrage oppurtunity to vanish