4, (10 points) Consider the following three bonds (settlement: 2/ 15/94). Coupon Rate Maturity Price 7 8/15/94 101 :20 6 _ 8 5 1 2/15/95 101 : 18 2 7E 2/15/95 103:24 4 Construct a portfolio of the 6g and the 7 3 bonds which replicates the cash ows of the 5 % bond. Please compare the price of the replicating portfolio to the price of the Sibond. If there is an arbitrage opportunity, please state your trading strategy