Question 22 (1 point) You are given the following information: - Bond A is a 1-year, O-coupon bond with face value $2,000 and YTM = 4% - Bond B is a 3-year, 3% coupon bond with face value $1,000 and YTM = 3% - Bank X is offering Product X (which is fairly priced). If you buy Product X then: Att = 0 you have to pay $4,000 to Bank X At t =1 you have to pay $5,000 to Bank X Att = 2 Bank X pays you $6,000 At t = 3 you have to pay $7,000 to Bank X You work at Bank Y, and you can sell Product Y to a client. For every one unit you sell: Att = 0 the client pays Bank Y $8,000 At t=1 the client pays Bank Y $3,000 Att = 2 Bank Y pays Z to the client At t = 3 Bank Y pays 11,000 to the client where Z is $100 less than what it would be if Product Y were fairly priced. Assume that you execute the following arbitrage strategy, where your arbitrage profit will be realized at t = 2: You sell Y units of product Y to a client You buy A units of Bond A You buy B units of Bond B You buy 2 units of Product X from Bank X Based on the question above, which of the following best represents the amount of your arbitrage profit at t = 2? Y(Z) 100 Y(100) Y(Z - 100) (Z + 100) None of the above