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There are two bonds with 1 year to maturity, they have the same price and paythe same coupons on the same day but Bond A

There are two bonds with

1

year to maturity, they have the same price and paythe same coupons on the same day but Bond A has a face value of

103

and Bond B has aface value of

100 .

Explain how an arbitrageur will exploit this anomaly

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