Problem 3 - Part A

You are given the following details of four default free government bonds. Assume that one can take long (buy) and short (sell) positions in these bonds. CF stands for cash flow.

Table for Problem 3

Bond	Current price Today	CF Year 1	CF Year 2	CF Year 3
A	95.240	100	0	0
B	90.340	0	100	0
C	87.245	0	0	100
D	X	100	100	1100

What is the current theoretical price of Bond D, as per the no-arbitrage principle? In other words, what should be the value of X?

[Round-off your final answer to four decimals to obtain as accurate answer as possible on Canvas.]