Suppose that the one-year spot rate is 2%, the two-year spot rate is 3%, and the three-year spot rate is 4%. A three-year 5% annual coupon paying bond has YTM at 5%. Assume the bond is default free. Is there any arbitrage opportunity? If there is, please write down a strategy to exploit it.

(hint: assume you can buy or short sell any one-year, two-year and three-year zero coupon bond at the corresponding spot rates.)