as.su.me b.on.ds p.ay a s.in.gl.e a.nn.ual co.up.on ea/ch ye/ar if /any an/d t/h/at /a/ll b/o/nds h/a/ve a fa/c/e va/lu/e o/f $1000.

B.on.d & Ma.tu.rity	Pr.i.ce ($)	Co.u.pon ra.te	S.&P ra.ti.ng
AB.C - 1 ye.ar	952.38	0%	AA+
X.YZ - 2 yea..rs	981.92	6%	A-
M.NO - 3 y.ears	921.27	4%	AA+

Deter..ine the term-.str.cture of spot rat.es and c.omment on w.hich co.ndition the yi.ld cur.ve wo.uld be through time . Next, bootstrap the 1 year forward 1 year rate and the 2 year forwa.rd 1 yea.r ra.te.

Your pro/prietary model o/f interest rate for/ecasts has just g/enerated this /esti/mated yield curve conditio/nal on rati/ng quality (

Rating	1 year spot rate	2 year spot rate	3 year spot rate
AA+	5% p.a.	6% p.a.	6.5% p.a.
A-	6% p.a.	7.5% p.a.	9% p.a.
BBB	7% p.a.	8.5% p.a.	10% p.a.

Ass/uming you tru/st this mo/del forec/ast, which of the b/onds lis/ted above should you sell, w/hich sho/uld you b/uy and w/hich shou/ld yo/u ho/ld? Calcula/te valu/es to ju/stify your ans/wer.