Given the benchmark annual Par Curve shown below calculate the spot and forward rates for each period. Calculate the spot and forward rates for each period. Draw a 3-year binomial tree assuming interest rate volatility is 10%. Show the forward rates at each node. Assume the bench-mark risk-free spot rates for one-year and two-year are both 2%. You come across the following quotes for risk-free two-year bonds, which is mispriced and therefore most likely has an arbitrage opportunity? The on-the-run issue for the Net Company is shown below along with the spot rates (assume annual compounding): Assuming an interest rate volatility of 10% for the 1-year rate, the binomial interest rate tree for valuing a bond with a maturity of up to three years is shown below: Given the benchmark annual Par Curve shown below calculate the spot and forward rates for each period. Calculate the spot and forward rates for each period. Draw a 3-year binomial tree assuming interest rate volatility is 10%. Show the forward rates at each node. Assume the bench-mark risk-free spot rates for one-year and two-year are both 2%. You come across the following quotes for risk-free two-year bonds, which is mispriced and therefore most likely has an arbitrage opportunity? The on-the-run issue for the Net Company is shown below along with the spot rates (assume annual compounding): Assuming an interest rate volatility of 10% for the 1-year rate, the binomial interest rate tree for valuing a bond with a maturity of up to three years is shown below