The current on-the-run yields for the Ramsey Corporation are as follows Assume that each bond is an annual-pay bond. Each bond is trading at par, so its coupon rate is equal to its yield to maturity. (a) Using the spot rates, what would be the value of a 3-year 6.5% option-free bond issue (b) Build a binomial interest-rate tree using the above information (assumes that 1year rates undergo a lognormal random walk with volatility =10% ) and determine the value of a 3 -year 6.5% coupon option free bond issue. (c) Using the binomial interest rate tree in (b), determine the value of a 3-year 6.5\% coupon bond that is callable at par (100), assuming that the issue will be called if the price exceeds par (d) What is the call option price for this 3 -year 6.5% callable bond