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Consider a bond that currently costs $500, and offers $100 bimonthly coupons. You decide to agree to a forward on this asset taking the risk-free
Consider a bond that currently costs $500, and offers $100 bimonthly coupons. You decide to agree to a forward on this asset taking the risk-free rate of 5.3% per year and a maturity of 9 months. If the agreed k is $1,200. What arbitration strategy would you follow? Obtain the forward price of this contract.
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