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4, (10 points) Consider the following three bonds (settlement: 2/15/94). Coupon Rate Maturity Price 7 8/15/94 101:20 2/15/95 101:18 2 2/15/95 103:24 4 Construct a

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4, (10 points) Consider the following three bonds (settlement: 2/15/94). Coupon Rate Maturity Price 7 8/15/94 101:20 2/15/95 101:18 2 2/15/95 103:24 4 Construct a portfolio of the 67 and the 72bonds which replicates the cash flows of the 52 bond. Please compare the price of the replicating portfolio to the price of the 5 bond. If there is an arbitrage opportunity, please state your trading strategy

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