Question 1- Create Two Synthetic Bonds First synthetic bond can be created by combining non-callable bonds maturing in 2005 with zero coupon Treasuries, also called STRIPS, maturing in 2005 This synthetic bond will have semiannual interest payments of $4.125 per $100 face value and final payment of $100 at maturity exactly matching those of the callable bond, if the callable bond was not called. Another synthetic bond could be constructed by combining non-callable bonds maturing in 2000 with STRIPS maturing in 2000