Given a fixed-income security, it will generate cash flows in the next 3 months and 6 months, respectively. 10 yuan and 50 yuan:

Assuming that the interest rate is a fixed 6% which does not change with the term, please calculate the arbitrage-free price of this fixed-income security under simple compound interest.

Assuming that the market price of fixed-income securities is lower than the arbitrage-free price obtained in the previous item, please explain how to carry out arbitrage.

Suppose the central bank suddenly reduces the interest rate to 4%, how to carry out arbitrage before the price of fixed income securities has been adjusted.

6. Arbitrage-risk-free reward Single-price theory Buying low and selling high is the principle Buy and sell at the same time, lock in the spread 6. Arbitrage-risk-free reward Single-price theory Buying low and selling high is the principle Buy and sell at the same time, lock in the spread