(valuing bondsury coupon bond lid annually. Assume Question 3 (valuing bonds & law of one price) The maturity date of a Treasury coupon bond is 3 years, its coupon rate is 6% and its par value is $1,000. The coupon payment is paid annually. Assume that all these bonds have similar default risk and the trading of fractions of a bond is allowed (up to two decimal points). Spot interest rates Term (years) Spot rates (zero-coupon Treasury bonds) 2% 3% 5% (a) Calculate the no-arbitrage price (or fair selling price) of the Treasury coupon bond (each copy). (b) If the market price is $1,050, is there an opportunity for arbitrage profit? Explain how to pursue the arbitrage profit by using the zero-coupon Treasury bonds if you intend to trade 50 copies of this Treasury coupon bond