I am working on this financial homework problem and am having issues getting the correct answer Any help would be greatly appriciated Thank you in advance 1) Consider two securities that pay risk free cash flows over the next two years and that have the current market prices shown here Security Price Today Cash Flow in 1 Year Cash Flow in 2 Years B1 $92 $100 $0 B2 $84 $0 $100 a) What is the no arbitrage price of a security that pays cash flows of $100 in one year and $100 in two years b) What is the no arbitrage price of a security that pays cash flows of $100 in one year and $400 in two years c) Suppose a security with cash flows of $100 in one year and $50 in two years is trading for a price of $130 What arbitrage opportunity is available

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Question: I am working on this financial homework problem and am having issues getting the correct answer. Any help would be greatly appriciated. Thank you in

I am working on this financial homework problem and am having issues getting the correct answer. Any help would be greatly appriciated. Thank you in advance!

1) Consider two securities that pay risk-free cash flows over the next two years and that have the current market prices shown here:

Security	Price Today	Cash Flow in 1 Year	Cash Flow in 2 Years
B1	$92	$100	$0
B2	$84	$0	$100

a) What is the no-arbitrage price of a security that pays cash flows of $100 in one year and $100 in two years?

b) What is the no-arbitrage price of a security that pays cash flows of $100 in one year and $400 in two years?

c) Suppose a security with cash flows of $100 in one year and $50 in two years is trading for a price of $130. What arbitrage opportunity is available?

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