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Prices of​ zero-coupon, default-free securities with face values of $1,000 are summarized in the following​ table:...

Prices of​ zero-coupon, default-free securities with face values of $1,000 are summarized in the following​ table:

Maturity​ (years)

1

2

3

Price​ (per

$1,000

face​ value)

$971.11

$937.99

$903.61

Suppose you observe that a​ three-year, default-free security with an annual coupon rate of 10% and a face value of $1,000 has a price today of $1,182.73. Is there an arbitrage​ opportunity? If​ so, show specifically how you would take advantage of this opportunity. If​ not, why​ not?

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