Question: Consider a bond that pays $ 1 0 0 0 at the end of the year. Suppose the market interest rate for deposits is 6

Consider a bond that pays $1000 at the end of the year. Suppose the market interest rate for deposits is 6%, but the market interest rate for borrowing is 6.5%.
a. What is the no-arbitrage price range for the bond? That is, what is the highest and lowest price the bond could trade for without creating an arbitrage opportunity?
b. If the bond price is P=960, how it will create the arbitrage opportunity
c. If the bond price is P=920, how it will create the arbitrage opportunity
Consider a bond that pays $ 1 0 0 0 at the end of

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