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4. The current on-the-run yields for the BCP Corporation are as follows Maturity (years) Yield to Maturity (%) Market Value Spot Rate (%) One-Year Forward

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4. The current on-the-run yields for the BCP Corporation are as follows Maturity (years) Yield to Maturity (%) Market Value Spot Rate (%) One-Year Forward (96) 1.000% 2.000% 3.000% 1,000 1,000 1,000 1.000% 2.010% 3.041% Assume that each bond is an annual-pay bond. (25 points) Using the spot rates given to you, what would be the value of a 4.00% 3-year to maturity option free bond of the BCP Corporation? Show your work. (10 points) a. Using the forward rates, what would be the value of a 4.00% 3-year to maturity option-free bond of the BCP Corporation? Show your work. (15 points) b

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