Question: Consider two bonds, Bond A and Bond B , each promising a $ 1 5 0 payoff in one year. Bond A is currently priced

Consider two bonds, Bond A and Bond B, each promising a $150 payoff in one year. Bond A is
currently priced at $140, while Bond B is priced at $138. How could you potentially earn an
arbitrage profit by trading these bonds?
a) Buy Bond A and hold it until maturity.
b) Buy Bond B and short Bond A simultaneously.
c) Short Bond B and use the proceeds to buy Bond A.
d) Purchase Bond B and reinvest the $150 payof

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