3 Question3: Suppose the Bond Yields and prices are observed the semiannual coupon bonds shown in the table. 1. The discount factors are derived from the prices of the zero-coupon bonds? 2. If the one year spot rate is 6.2%. Is there an arbitrage opportunity? Explain your answer 3. Describe your traded steps necessary to exploit this arbitrage opportunity and calculate your net income. (6 Points) Maturity YTM Coupon Price (% of par) 0.5 year 3% 0 99.258 0% 97.561 5% 1 year 5% 596 1 year 100.000 w 3 Question3: Suppose the Bond Yields and prices are observed the semiannual coupon bonds shown in the table. 1. The discount factors are derived from the prices of the zero-coupon bonds? 2. If the one year spot rate is 6.2%. Is there an arbitrage opportunity? Explain your answer 3. Describe your traded steps necessary to exploit this arbitrage opportunity and calculate your net income. (6 Points) Maturity YTM Coupon Price (% of par) 0.5 year 3% 0 99.258 0% 97.561 5% 1 year 5% 596 1 year 100.000 w