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Obtaining discount factors. Given the following bonds, calculate the implied 1 - year and 2 - year discount factors ( $ 1 0 0 face,
Obtaining discount factors. Given the following bonds, calculate the implied year and year
discount factors $ face, annual coupon
Show that there is an arbitrage opportunity with Bond C $ face, annual coupon What is the
value of the arbitrage if you trade one unit of Bond C Construct an arbitrage portfolio.
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