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Is there a profitable arbitrage opportunity for the bonds shown below? If so, please demonstrate clearly. All prices are per $100 in face value. Term

Is there a profitable arbitrage opportunity for the bonds shown below? If so, please demonstrate clearly. All prices are per $100 in face value.

Term to maturity Price Coupon

6-months $95 0

1-year $105 10% annual (paid semi-annually)

1-year $98 0

image text in transcribed

Action today Cash flow today Cash flow in 6 mo. Cash flow in 1 year

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