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A) What price should a 3 year semi-annual 10% coupon bond with S1000 face value be trading at If the prices of similar risk zero

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A) What price should a 3 year semi-annual 10% coupon bond with S1000 face value be trading at If the prices of similar risk zero coupon of (5100 face value) bonds are given below: 1.5 2.5 Term (In Years) Price in ) 0.5 100 2 93 3 91 97 96 92 89 B) How would you arbitrage the opportunity if you found out that the bond in Part A above was trading at par? Specifically, explain which bonds will you buy and which one/s will be sell today and in how much quantities? A) What price should a 3 year semi-annual 10% coupon bond with S1000 face value be trading at If the prices of similar risk zero coupon of (5100 face value) bonds are given below: 1.5 2.5 Term (In Years) Price in ) 0.5 100 2 93 3 91 97 96 92 89 B) How would you arbitrage the opportunity if you found out that the bond in Part A above was trading at par? Specifically, explain which bonds will you buy and which one/s will be sell today and in how much quantities

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