Pages • 1
Arbitrage in the Government Market Case Assignment Xiaoxue LuFixed Income SecuritiesProfessor Natalia Reisel10/03/2017Arbitrage in the Government Market Case Assignment1. Create the two synthetic bonds described in the case. How should the price of these synthetics relate to the callable bonds? Why? On January 7, 1991, how much would it cost to create the synthetic using the ‘05s? the ‘00s?Thompson.