(Mark Value = 3) 4. The current annual effective risk-free interest is 5%. You observe that a zero-coupon risk-free bond

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answerhappygod
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(Mark Value = 3) 4. The current annual effective risk-free interest is 5%. You observe that a zero-coupon risk-free bond

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(Mark Value = 3)
4. The current annual effective risk-free interest is 5%. You
observe that a zero-coupon risk-free bond with a face value of
1,000 and a maturity of two years has a price of 910.
Construct an arbitrage portfolio. Assume that you can lend and
borrow at the risk-free rate.
show work
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