1) The following bonds are trading in the market: Bond Time-to-maturity Face Value A 1 year $100 B 2 years $100 3 years $100 D 4 years $100 Infer the term structure of interest rates, Coupon Rate 0% 10% 20% 0% Price $95.24 $107.42 $140.51 $85.48 2) In addition to the bonds in the last question, you also observe some other bond (bond E) trading in the market at $136. Bond E has a time-to-maturity of two years, a face value of $100 and pays a coupon rate of %25. Show that there is an arbitrage opportunity and how to exploit It. 1) The following bonds are trading in the market: Bond Time-to-maturity Face Value A 1 year $100 B 2 years $100 3 years $100 D 4 years $100 Infer the term structure of interest rates, Coupon Rate 0% 10% 20% 0% Price $95.24 $107.42 $140.51 $85.48 2) In addition to the bonds in the last question, you also observe some other bond (bond E) trading in the market at $136. Bond E has a time-to-maturity of two years, a face value of $100 and pays a coupon rate of %25. Show that there is an arbitrage opportunity and how to exploit It