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  3. if the price of the 1-year coupon bond was $1030.

If the price of the 1-year coupon bond was $1030. How would you take advantage...

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Accounting

If the price of the 1-year coupon bond was $1030. How would you take advantage of the arbitrage opportunity?

A. Buy 1 unit of 1-yr coupon bond, sell 10 unit of the 6-mo zero and 110 unit of the 1-yr zero

B. Buy 1 unit of 1-yr coupon bond, sell 1 unit of the 6-mo zero and 11 unit of the 1-yr zero

C. Sell 1 unit of 1-yr coupon bond, buy 10 unit of the 6-mo zero and 110 unit of the 1-yr zero

D. Both A and B are correct

all info is given

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