7. Suppose you observe a 4-year Treasury bond with a 3% coupon (paid annually) and a $1,000 par value. What is the arbitrage-free price of this bond? Suppose that the bond in question #7 has a yield-to-maturity of 5.50%. If you were to exploit this mispricing opportunity, what would your arbitrage profit be? Assume that you can invest any amount in STRIPS and that 1-4-year STRIPS are correctly priced based on the spot rates that you have calculated. In order to benefit from the arbitrage opportunity in question #8, how much should you invest in a 1-year STRIP? How much should you invest in 2-year strip? How much should you invest in a 3-year strip? How much should you invest in a 4-year strip