2. Consider the following bonds currently traded in the market.

	Annual Coupon	Maturity in Years	Price
Bond 1	8%	1	102.8
Bond 2	9%	2	107.25
Bond 3	11%	3	116.4
Bond 4	6%	4	104.41
Bond 5	7%	5	108.03
Bond 6	8%	6	113.95
Bond 7	10%	7	127.02

(a) Using this information find the no-arbitrage price of a 5-Year bond with coupon of 5%. (b) Suppose this bond is currently selling for $102 in the market. Is there an arbitrage opportunity? Explain how you would execute this arbitrage (All coupons are annual payment, including the bond you are asked to price)