Assume there are four default-free bonds with the following prices and future cash flows: Do these bonds

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Assume there are four default-free bonds with the following prices and future cash flows:


Assume there are four default-free bonds with the following prices


Do these bonds present an arbitrage opportunity? If so, how would you take advantage of this opportunity? If not, whynot?

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Corporate Finance

ISBN: 978-0133097894

3rd edition

Authors: Jonathan Berk and Peter DeMarzo

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