Suppose a trader would like to buy a t1-maturity bond at time t0. The trader also wants this bond to be liquid. Unfortunately, he discovers that the only bond that is liquid is an on-the-run Treasurywith a longer maturity of t2. All other bonds are off-the-run.How can the trader create the liquidshort-term bond synthetically assuming that all bonds are of discount type also that, contrary to reality,forward loans are liquid? ( 10 Points)