Question: There is a 5-year maturity bond, with a par value of 1.000 Chilean Pesos (CLP) and that has a 3,5% coupon. If a broker quoted

There is a 5-year maturity bond, with a par value of 1.000 Chilean Pesos (CLP) and that has a 3,5% coupon. If a broker quoted the bond at 975 Chilean Pesos, please calculate the possible arbitrage using Zero Coupon bonds. r1: 2.90% r2: 3.30% r3: 3.80% r4: 4.00% r5: 4.16%

Short the zero coupon bond portfolio and long the coupon bond making a profit of 7.83 CLP

Long the zero coupon bond portfolio and short the coupon bond making a profit of 7.83 CLP

Long the zero coupon bond portfolio and short the coupon bond making a profit of 2.79 CLP

Short the zero coupon bond portfolio and long the coupon bond making a profit of 2.79 CLP

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