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Let the term structure be given by the following model (Ho-Lee) f(t, T) = f(0, T) + sigma^2 t(T - t/2) + sigma B_t. (a)

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Let the term structure be given by the following model (Ho-Lee) f(t, T) = f(0, T) + sigma^2 t(T - t/2) + sigma B_t. (a) Find the short rate r_t. (b) Write the equation for forward rates in terms the short rate. (c) Find the expression for the bond. Consider P(0, T) as known

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