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Problem 1) Assume that one can obtain borrow and lend for t years at an annual interest of r continuously compounded

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Problem 1) Assume that one can obtain borrow and lend for t years at an annual interest of r continuously
compounded. Show that the arbitrage free price P of a $1 face value zero coupon bond with maturity in t years
equals e ", i.e. P = e ", by constructing arbitrage strategies otherwise.