. A BB+ rated firm leg. a high yield or non-investment grade) has issued a calable bond with the following features: Exactly 2 years to maturity 10% annual coupon $100 par value The bond is callable in exactly one year (the call price will be given below) . From these spot rates you infer the following forward rates Time Period Rate 1yly 2yly 3yly 2yly 9.015 11.03% 12.60% 11.07% Assume the call price of the bond listed above is $100.5. What is the price of the callable bond if you expect no uncertainty le.s. 2er volatility in future interest rates? 110.5 O 100 103.27 99.67 o C G Suppose you are given the following set of spot rates: Time Period Rate Oyly 7% Oy2y 8% Oy3y 9% From these spot rates you infer the following forward rates: Time Period Rate 9.01% 1yly 2yly 11.0396