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Is there an arbitrage opportunity

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Reference no: EM132856341

Question - Bond A is an 8% coupon bond with 2 years to maturity and face value of $100. Bond A makes annual coupon payments and is currently selling for $105.50. Is there an arbitrage opportunity? If yes, explain in detail how you can take advantage of it and earn $1,000. If not, carefully explain what an arbitrage opportunity is.

Reference no: EM132856341

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