Now suppose the $1-$year spot rate is $r_1=1\mathrm{.}1\%,$ the $2-$year spot rate is $r_2=2\%,$ and the $1-$year

forward rate in year $1$ is $f_1=4\mathrm{.}4\%.$ The prices of bonds are different from the subquestions above.

Assume at time $0$ we invest $$x$ in $1-$year bond, short $$x$ in $2-$year bond, and invest $$y$ at time $1$ at

the fixed forward rate. If this is an arbitrage strategy generating $$100$ at time $t=1$ and nothing

otherwise, then:

$x=$

$y=$

Note that since we effectively invest $y$ at time $1,y$ is a negative number.