Suppose that two risk-free zero-coupon bonds, X and Y, mature in one year. Both bonds have a face value of $200. There are no transaction costs for shorting a bond, but there are for buying the bond. The price of X is $202 and the price of Y is $203.50.

If there are no profitable arbitrage opportunities for an investor, then it must be the case that:

a. The cost of buying a bond exactly equals $1.50 per bond.

b. The cost of buying a bond is less than or equal to $1.50 per bond.

c. The cost of buying a bond is greater than $1.50 per bond.

d. The cost of buying a bond is greater than or equal to $1.50 per bond.