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Assume tFT2 = tf11 (1 + T1'72) + T1CT2 is the equilibrium situation. Also assume that T2-T1 is one year, that T1CT2 = $3 and

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Assume tFT2 = tf11 (1 + T1'72) + T1CT2 is the equilibrium situation. Also assume that T2-T1 is one year, that T1CT2 = $3 and that T1T2 = 10%. What statement is true about the following 2 prices: FT1 = 100 & +Ft2 = 133? they are not equilibrium prices since there is an arbitrage profit of 18 they are not equilibrium prices since there is an arbitrage profit of 22 they are equilibrium prices they are not equilibrium prices since there is an arbitrage profit of 20

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