You are given the following information about three financial securities in the market:

• Regular Annuity: Maturity = 5 years, Annual payments in arrears (at the end of a year) = $240.000, Current price = $931.902.
• Regular coupon bond: Maturity = 5 years, Face value = $1,000.000, Coupon rate = 6.000%, Current price = $908.004.
• Zero-coupon bond: Maturity = 5 years, Face value = $100.000, Current price = $69.503.

(Round-off to at least 4 decimal places.)

Assuming that an arbitrager can buy/(short) sell the fraction and/or integer quantities of the above securities. What will be the arbitrage strategy at t=0 which results in positive cash flow of approximately $20.00 at t=0 and zero outflows at t=1, t=2, t=3, t=4, and t=5?

S1) [ Select ] ["Sell", "Buy", "Do Nothing", "Hold"] [ Select ] ["1", "2", "1/2", "3/2", "5", "6", "10", "1/4", "10/4"] quantity of Regular Annuity; and

S2) [ Select ] ["Sell", "Buy", "Hold", "Do Nothing"] [ Select ] ["1", "2", "3", "4", "5", "6", "10"] quantity of Regular Coupon Bond; and

S3) [ Select ] ["Sell", "Buy", "Hold", "Do Nothing"] [ Select ] ["1", "2", "3", "1/2", "4", "6", "10"] quantity of Zero-Coupon Bond.