Treasury spot rates (expressed in semiannual-pay yields to maturity) are as follows: 6-months = 4%, 1-year = 5%, 1.5 years = 6%. A 1.5- year, -1% Treasury note is trading at. $965. The arbitrage trade and arbitrage profit are (a) buy the bond, sell the pieces, earn $7.09 per bond. (b) sell the bond, buy the pieces, earn $7.09 per bond. (c) sell the bond, buy the pieces, earn $7.91 per bond.

With complete solutions and explanation please.