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A 5 - year 4 % coupon Treasury bond currently sells for $ 8 0 . A 5 - year 6 % coupon Treasury bond

A 5-year 4% coupon Treasury bond currently sells for $80. A 5-year 6% coupon Treasury bond currently sells for $88. What is the price of a 5-year zero-coupon Treasury bond? Assume i) all these bonds have a par value of $100 and pays coupon semannually. i) There are no arbitrage opportunities. iii) There are no restrictions on short selling. A. $60 B. $64 C. $72 D. $76

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