9 - Part A [Problem 9 is a two-step problem. First part (Part A) requires you to find theoretical value of an asset. The second part requires you to construct an arbitrage strategy.] You observe following three financial securities in the market: Regular Annuity: Maturity = 5 years, Annual payments in arrears = $240, Current price = $974.20. Regular coupon bond: Maturity = 5 years, Face value = $1,500, Coupon rate = 8%, Current price = $1477.16. Zero-coupon bond: Maturity = 5 years, Face value = $500, Current price = $332.52. Suppose that, you are convinced that the prices of zero-coupon and regular coupon bonds are done correctly in the market. Then, as per you, what should be the