Suppose a friend offers to give you a $1,000 bond that matures in 11 months in exchange for $990 two months from now. Always the wary consumer, you ask if they would be willing to pay you $990 in two months in exchange for the same bond today. After some consideration they agree to take either side of that trade.

Explain how you could use these offers to make arbitrage profits assuming that you can borrow or lend at the same rate as treasuries with no transaction costs.