Someone please help with this question.

Your fixed income arbitrage hedge fund has $100 in capital. Assume that you observe the following U.S. treasury bonds today( both bonds just paid their last coupon payment yesterday)

1. Your xed income arbitrage hedge fund has $100 in capital. Assume that you observe the following US. treasury bonds today (both bands just paid their last can on -a ment esterday) - Maturity Date Price (Dirty) eld to Maturity 10/15/14 10/8/20 2.75% $900 I 10/15/99 10/8/20 aimam A) Briey explain how you could take advantage of an existing arbitrage opportunity by buying 1 of the bonds and short selling 1 of the other bonds B) If your broker charged you a 2% haircut on a repurchase agreement for your long position and required 2% margin (in addition 100% of the short sale proceeds) on your short position, how much cash would you have to invest to execute both trades? C) If the yield on the 6.75% coupon bond decreased to the 5% yield on the 2.75% coupon bond, it would be worth $1,075; if the yield on the 6.75% coupon increased to 6%, it would be worth $1,025. Assume that the yield on the 2.75% coupon bond does not change C1) What would your profit and rate of return be if the yield on the 6.75% coupon bond rose to 6%? How much more cash would you have to provide to the broker? Microsoft Word | C2) What would your prot and rate of return be if the bond yields immediately converged so both bonds yielded 5%? How much cash would you have to provide to the broker? D) 15 this trade eventually guaranteed to be profitable? What are the risks for your $100 fund