Consider a $3-$year leveraged inverse floater that pays a coupon of $25\%$ minus two time the short$-$term interest rate.

What is a portfolio of bonds that pays this cash flow?

Year $|$ Discount Factor

$1|0\mathrm{.}9642$

$2|0\mathrm{.}9193$

$3|0\mathrm{.}8745$