5> The Following quotes on Treasury Notes and Bonds are obtained from Barrons, Sep 27, 2015.

Rate	Maturity Mo/Yr	Bid	Asked
3 1/8	Jan 17	103.46875	103.50000

Assume the settlement date is Sep 28, 2015 and all securities mature on the 15^th of the month.

Please compute the clean price (asked), accrued interest, and dirty price (asked).

<6> The YTM on 1-year zero coupon bonds is 5% and the YTM on 2-year zero coupon bonds is 6%. The YTM on 2-year maturity coupon bonds with coupon rates of 12% (paid annually) is 5.8%. Assume the face value of bonds is $1,000 and these bonds have similar risk.

1. What should be the price of this 2-year maturity coupon bond, if we use no-arbitrage pricing approach based on the zero-coupon bonds?
2. What arbitrage opportunity is available given these prices? Show the cash flows from the arbitrage.