Consider 1-year and 2-year spot rates of r(1) = 6.2% and r(2) = 8.2% Consider the following bonds: Bond A: 2-year, 5% coupon bond; fairly priced Bond B: 2-year, 7% coupon bond; fairly priced Bond C: 2-year, zero-coupon bond; incorrectly priced at $83 a) (1 point) Calculate bond C's fair price. b) (3 points) Find an arbitrage strategy by trading the 3 bonds available to you, replicating the cash flows from Bond C. How many of each bond will you trade? Which bonds would you buy or sell? For reference, fill out the following table: Buy or Sell Buy or Sell Buy or Sell e.g. BUY Number of Bonds: Number of Bonds: Number of Bonds: 3 Bonds Of Bond A Of Bond B Of Bond C Of Bond X