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Interest rates: 3.1230% (r0), 5.2136% (r1,H), 3.5862% (r1,L), 7.6860% (r2,HH), 5.1216% (r2,HL), and 3.0812% (r2,LL). Bond A: $100 par, a remaining maturity of 3 years,
Interest rates: 3.1230% (r0), 5.2136% (r1,H), 3.5862% (r1,L), 7.6860% (r2,HH), 5.1216% (r2,HL), and 3.0812% (r2,LL). Bond A: $100 par, a remaining maturity of 3 years, 5% coupon payable annually, callable at $102 and $101.50 in Year 1 and Year 2 from now, respectively, and putable at par in both Year 1 and Year 2 from today. Bond B shares the same characteristics as those of Bond A, except that it is not putable. Bond C shares the same characteristics as those of Bond A, but is not callable. Compute the price differences (in absolute value) between Bonds A and B, and between Bonds A and C, respectively
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