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The following bonds are trading In the market Bond Time to maturity Face value Coupon rate Price A 1 year $100 09% $95.24 1 2

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The following bonds are trading In the market Bond Time to maturity Face value Coupon rate Price A 1 year $100 09% $95.24 1 2 years $100 109% $107.42 C 3 years $100 20% $140.51 D 4 years $100 04 84543 Infer the term structure of interest rates. 21 In addition to the bands in the last question, you also observe some other bond (bond E) trading in the market at $136. Bond E has a time to maturity of two years, a face value of 3100 and pays a coupon rate of It. Show that there is an arbitrage opportunity and how to exploit it

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