The market one-year, strip (zero) spot rate is 4.5%, and the forward rate from year one to year two (meaning for lending/borrowing money in a year for one more year) is 3.5%. Today, an individual is willing to lend or borrow money for two years at an annual rate of 4.6%. Is there an arbitrage opportunity? If yes describe it.

Question S1 (10 Points) The market one-year, strip (zero) spot rate is 4.5%, and the forward rate from year one to year two (meaning for lending/borrowing money in a year for one more year) is 3.5%, Today, an individual is willing to lend or borrow money for two years at an annual rate of 4.6%. Is there an arbitrage opportunity? If yes describe it. Question S1 (10 Points) The market one-year, strip (zero) spot rate is 4.5%, and the forward rate from year one to year two (meaning for lending/borrowing money in a year for one more year) is 3.5%, Today, an individual is willing to lend or borrow money for two years at an annual rate of 4.6%. Is there an arbitrage opportunity? If yes describe it