Exercise 1: The following table shows information on two traded bonds that make annual payments: Bond Type Face value Coupon Maturity Price A Zero-coupon bond $100 1 year $90.00 B Coupon bond $100 10% 2 years $102.50 a. What should the (no-arbitrage) price of a 2 year zero-coupon bond with a face value of $100 be? b. Show how you can make an arbitrage profit if the price of a 2-year zero coupon bond is $95. c. Show that there is an arbitrage opportunity if the price of a 2-year zero-coupon bond is $80