2. ( $:5 5 ) In this problem you are to fantasize that you are a bond trader looking for arbitrage opportunities . The first column of the following table gives the current prices of three government ( default free ) bonds . Assume that you can take long and short positions in these bonds at the given prices . ( If you short a bond you receive the current price* but you must pay out all future cash flows . ) The remaining columns of the table show the cash flows ( OF ) produced by the bonds at the end of years 1 and 2. All bonds mature at or before the end of wear