The solution is to replicate the 1 year 8% bond using the other two treasury bonds. In order to replicate the cash flows of the 8% bond, you could solve a system of equations to determine the weight factors, F₁ and F₂, which correspond to the proportion of the zero and the 10% bond to be held, respectively.

The two equations are as follows: (100 × F₁) + (105 × F₂) = 104 (replicating the cash flow including principal and interest payments at the end of 1 year), and (5 × F₂) = 4 (replicating the cash flow from the coupon payment in 6 months.)

Solving the two equations gives us F₁ = 0.2 and F₂ = 0.8. Thus the price of the 8% bond should be 0.2 × 96.12 + 0.8 × 106.2 = 104.18.