QUESTION 13 Maturity (years) Spot rate (%) 1-year Forward rate (%) Cash flow 1 1.25 0-years from now 1.25 $3 2 1.5019 1-year from now 1.75 $3 3 1.70491 2-years from now 1.908 $103 Assume the current 1-year rate is 1.2%. Using the binomial model and the 1-year forward rate one year from now, what is the price of a 2-year bond that pays 8% coupon? Par value is $1,000 A. $1,139.06 OB. $1,159.06 O C. $1,129.06 D. $1,019.06