Fixed Income

Valuation of Bonds:

Use following equivalent forms of yield curve with maturities of one, two and three years.

$\backslash$table$[[$Maturity $($years$),$Par Rate $(\%),$Spot Rate $(\%),\backslash$table$[[$One Year Forward Rate$],[(\%)]]],[1,2\mathrm{.}500,2\mathrm{.}500,0$ year from now $2\mathrm{.}500],[2,3\mathrm{.}000,3\mathrm{.}008,1$ year from now $3\mathrm{.}518],[3,3\mathrm{.}500,3\mathrm{.}524,2$ years from now $4\mathrm{.}564]]$

Calculate the value of a three years option free $4\mathrm{.}00\%$ annual coupon bond

Calculate the value of a three year $4\mathrm{.}25\%$; Annual Coupon Bond Callable at Par One year and Two years from now at Zero Volatility.

Calculate the value of a three years $4\mathrm{.}25\%$ Annual Coupon Bond Putable Par One year and Two years from now at Zero Volatility