If the value of a Treasury bond was higher than the value of the sum of its parts (STRIPPED cash flows),

A. arbitrage would probably occur.
B. arbitrage would probably not occur.
C. the FED would adjust interest rates.
D. None of the options are correct.


A. arbitrage would probably occur.

If the value of a Treasury bond was higher than the value of the sum of its parts (STRIPPED cash flows) arbitrage would probably occur.

Business

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