The yield to maturity (YTM) on 1-year zero-coupon bonds is 6% and the YTM on 2-year zeros is 7%. The yield to maturity on 2-year- maturity coupon bonds with coupon rates of 14% (paid annually) is 6.9%. a. What arbitrage opportunity is available for an investment banking firm? 10 points The arbitrage strategy is to buy zeros with face values of $ 0 and $ D , and respective maturities of one year and two years. b. What is the profit on the activity? (Do not round intermediate calculations. Round your answer to 2 decimal places.) eBook Profit each bond Print References