Use the following Treasury curve and forecast data: 1yr:3.0% 2yr:3.2% 3 yr: 3.5% 4 yr: 3.6% 5yr:3.8% 7 yr: 3.9% 10 yn: 4.0% 5yr TIPs: 0.5% 7 yr TIPS: 0.8% Investor survey for average of short-term rates over the next 3 years: 3.1% Investor survey for average of short-term rates over the next 7 years: 3.4% Investor survey for average of short-term rates over the next 10 years: 3.4% 1) Assume that you can borrow and invest at the zero coupon rates in the quoted yield curve (I know this is somewhat unrealistic but let's make the assumption for this problem). Also, assume you believe that 3 -year rates starting in two years will equal 4%. Finally, assume you have no money, but plenty of good collateral that you can borrow against. Outline a reasonable trade that combines borrowing and investing (Assume you can not directly access the forward markets). Explain your answer by including reference to the forward rates. Calculate your profit per $100 of investment amount. Use the following Treasury curve and forecast data: 1yr:3.0% 2yr:3.2% 3 yr: 3.5% 4 yr: 3.6% 5yr:3.8% 7 yr: 3.9% 10 yn: 4.0% 5yr TIPs: 0.5% 7 yr TIPS: 0.8% Investor survey for average of short-term rates over the next 3 years: 3.1% Investor survey for average of short-term rates over the next 7 years: 3.4% Investor survey for average of short-term rates over the next 10 years: 3.4% 1) Assume that you can borrow and invest at the zero coupon rates in the quoted yield curve (I know this is somewhat unrealistic but let's make the assumption for this problem). Also, assume you believe that 3 -year rates starting in two years will equal 4%. Finally, assume you have no money, but plenty of good collateral that you can borrow against. Outline a reasonable trade that combines borrowing and investing (Assume you can not directly access the forward markets). Explain your answer by including reference to the forward rates. Calculate your profit per $100 of investment amount