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Net Cash Flows from Selling the Bond and Investing
Borrow the overpriced bond promising to repay the lender $1000 in one year.  Sell the bond immediately for $960.  Put $952.38 in the bank where the it will gain enough to be worth $1000 in one year.  You have +$7.62 immediate cash flow.  In one year repay the bond lender with the $1000 from the bank.