Please answer Question

Fixed-income arbitrage is to seek mispriced Treasury coupon bonds, through a set of linear equations in the following framework: P1 = C1 . Po, 1 + C1 . Po,2 + ... + (C1 + F) . Po,r P2 = C2 . Po,1 + C2 . Po,2 + .. + (C2 + F) . Po,T Pn = On . Po, 1 + Cn . Po,2 + ... + (C, + F) . Po,T Part 1 Attempt 1/8 for 10 pts. What are P1, P2. ... . P.? O fair prices of the STRIPS O current prices of treasury coupon bonds observed in the market current prices of treasury STRIPS observed in the market O fair prices of treasury coupon bonds at the time Submit Part 2 - Attempt 1/8 for 10 pts. What do Po, 1. Po, 2. ... . Por denote? Select the most accurate one fair prices of treasury coupon bonds standardized for $1 face value O1-year STRIPS, 2-year STRIPS, ... T-year STRIPS current market prices of all STRIPS standardized for $1 face value current market prices of all treasury coupon bonds standardized for $1 face value SubmitPart 2 Attempt 1/8 for 10 pts. What do Po, 1, Po, 2. ... . Po,r denote? Select the most accurate one fair prices of treasury coupon bonds standardized for $1 face value 1-year STRIPS, 2-year STRIPS, ... T-year STRIPS current market prices of all STRIPS standardized for $1 face value current market prices of all treasury coupon bonds standardized for $1 face value Submit Part 3 Attempt 1/8 for 10 pts. About the framework of linear equations, which statements are true? Check all that apply: On the left hand side of the equations are fair value of the coupon bonds, and right hand side are market value of the coupon bonds Because there are over 200 Treasury Notes and Bonds trading everyday, but only 30-60 STRIPS, not all equations can hold Not all equations can hold, because market anomaly and market disruption happens from time to time Because the number of equation n is a lot greater than T, not all in equations can hold Not all equations can hold, because the market is not always efficient Because the total number of Treasury Notes and Bonds is a lot greater than total number of STRIPS, not all equations can hold Submit