10 marks) Suppose you observe the following information for three actively traded Treasur ponds that pay annual coupons. All three bonds have a par value of $100. (a) (6 marks) Calculate the price of a 3-year bond with a par value of $100, which pays an annual coupon at 12%. (b) (2 marks) Calculate the 1-year forward rates for year 2(f1,2) and year 3(f2,3). (c) (2 marks) Based on your answer in part (b), what would be the most appropriate term structure theory for the observed yield curve, briefly explain. 10 marks) Suppose you observe the following information for three actively traded Treasur ponds that pay annual coupons. All three bonds have a par value of $100. (a) (6 marks) Calculate the price of a 3-year bond with a par value of $100, which pays an annual coupon at 12%. (b) (2 marks) Calculate the 1-year forward rates for year 2(f1,2) and year 3(f2,3). (c) (2 marks) Based on your answer in part (b), what would be the most appropriate term structure theory for the observed yield curve, briefly explain