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Fill in the table For the 2-year, 2.5% coupon bond in Part J, fill out the table below regarding what five specific trades you would

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Fill in the table

For the 2-year, 2.5% coupon bond in Part J, fill out the table below regarding what five specific trades you would implement immediately in order to extract an arbitrage profit. Assume that all bonds have a face value of $1000. In the table, please report the smallest possible number of bonds you can trade in order to take advantage of the "Arb" opportunity (if there is one). HINT: The minimum number of coupon bonds to trade is 80 because $1000 face value divided by the $ coupon amount per period ($12.50) gives 80 . That is, for times 0.5,1.0, and 1.5, the semi-annual coupon payments of $12.50 must be scaled up by a factor of 80 in order to give the face value of the corresnonding zero-counon bonds (=$1000). For the 2-year, 2.5% coupon bond in Part J, fill out the table below regarding what five specific trades you would implement immediately in order to extract an arbitrage profit. Assume that all bonds have a face value of $1000. In the table, please report the smallest possible number of bonds you can trade in order to take advantage of the "Arb" opportunity (if there is one). HINT: The minimum number of coupon bonds to trade is 80 because $1000 face value divided by the $ coupon amount per period ($12.50) gives 80 . That is, for times 0.5,1.0, and 1.5, the semi-annual coupon payments of $12.50 must be scaled up by a factor of 80 in order to give the face value of the corresnonding zero-counon bonds (=$1000)

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