Use the following information to answer parts (a) and (b) below. Consider the following three Treasury strips: strip 1: 0.5-year, face value of $1,000, fairly priced at $970.29; strip 2: 1-year, par value of $2,000, fairly valued at $1,859.25; and strip 3: 1.5-year, face value of $3,000, fairly trading at $2,658.76. (a) What is the fair price of a 1.5-year Treasury note, with a face value of $4,000, and a coupon rate of 8% payable semiannually? (5 marks) (b) Suppose the Treasury note in part (a) above is actually selling at a YTM of 8.1% semiannually compounded, is there any arbitrage opportunity? Please show all the details. (7 marks) (c) Consider the following three bonds, which all have a par value of $100 and pay coupons semiannually when the coupon rate is not zero. What is the 6.5year spot rate on a BEY basis? (8 marks) Use the following information to answer parts (a) and (b) below. Consider the following three Treasury strips: strip 1: 0.5-year, face value of $1,000, fairly priced at $970.29; strip 2: 1-year, par value of $2,000, fairly valued at $1,859.25; and strip 3: 1.5-year, face value of $3,000, fairly trading at $2,658.76. (a) What is the fair price of a 1.5-year Treasury note, with a face value of $4,000, and a coupon rate of 8% payable semiannually? (5 marks) (b) Suppose the Treasury note in part (a) above is actually selling at a YTM of 8.1% semiannually compounded, is there any arbitrage opportunity? Please show all the details. (7 marks) (c) Consider the following three bonds, which all have a par value of $100 and pay coupons semiannually when the coupon rate is not zero. What is the 6.5year spot rate on a BEY basis? (8 marks)