Consider the following information regarding three annual coupon bonds:

Coupon / Maturity / Price

5% / 1 / $99.06

6% / 2 / $98.19

7% / 3 / $97.42

All bonds have face value of $100.

(d) Imagine that your bank offers you the following investment opportunity: In one year from now, you invest $100, and in three years from now you will get $125. However, you need to pay a bank fee to have access to this investment strategy. Assuming that the bank operates in the markets where the above bonds are available, what should be the bank fee (in dollars today) so that there is no-arbitrage?