Consider Bond A that is a 3% coupon 10-year annual-pay bond with a YTM equal to 3.2%. Assume that there is another Bond B that is a perfect substitute for Bond A and that sells for 97.220 per $100 of face value. What can be said about the arbitrage opportunity that might exist between Bond A and Bond B?

Group of answer choices

Bond A's price is equal to 97.220. an arbitrage opportunity exists

Bond A's price is equal to 98.351. no arbitrage opportunity exists

Bond A's price is equal to 98.311. an arbitrage opportunity exists

Answer rating: 100% (QA)

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