Use the following spot rates to answer the following questions. Maturity Spot rate (%) 1 year 4.93% 2-years 4.47% 3-years 4.12% 5-years 3.84% 10-years 3.68% Assume that Citibank is offering to sell a one-year Treasury bill next year with a rate of 5% (i.e., you can enter into a contract today to lock in a 5% return on a one-year security purchased/sold next year). Based on the above spot rates, does the Citibank offer generate any arbitrage opportunities? If so, compute the total $ profits that can be generated from this opportunity, specifying the steps you would take. Assume you will borrow/invest $1,000. Yes; $55.55/$1000 borrowed. O Yes; profit of $5.55/ $1000 borrowed. O No: $0 O No: Loss of $5.55/ $1000 borrowed.based on Citibank's offered rate.

Use the following spot rates to answer the following questions. Assume that Citibank is offering to sell a one-year Treasury bill next year with a rate of 5% ti.e, you can enter into a contract today to lock in a 5% return on a one-year security purchased/sold next vear). Based on the above spot rates, does the Citibank offer generate arry arbitrage opportunities? If so, compute the total $ profits that can be generated from this opportunity, specifying the steps you would take. Assume vou will borrow/invest $1,000. $1.000. Yees $55,55/$1000 borromed. Yex profit of \$555/ \$1000 borrowed. No: 50 No. Lost of 55.55/51000 borromed based on Citibanks offered rate