You are interested in valuing several bonds. The binomial interest rate tree that describes the evolution of the one-year interest rate in different interest rate states is presented in the following table. Year o Year 1 Year 2 Year 3 3.5% 5.429% (h) 9.199% 7.005% (hh) (hhh) 4.445% (1) 5.735% (hl) 7.531% (hhl) 4.696% (11) 6.166% (hll) 5.048% The annual spot rates for different maturities are presented in the following table. 1 Year 2 Years 3 Years 4 Years - 3.5% 4.2147% 4.7345% 5.2707% andal bondesaconnab The The annual spot rates for different maturities are presented in the following table. 1 Year 2 Years 3 Years 4 Years 3.5% 4.2147% 4.7345% 5.2707% Assume that the par value is $100 and all bonds pay coupon annually. The risk-neutral probability is 50% on each leg. a. Using the binomial interest rate tree, value a callable bond with three years to maturity. The bond is callable at a call price of 102 per 100 of par at the end of year 2. The bond pays 8% coupon. Please show the bond value tree and the call decision at each node. Retain accuracy to 3 decimal places. You are interested in valuing several bonds. The binomial interest rate tree that describes the evolution of the one-year interest rate in different interest rate states is presented in the following table. Year o Year 1 Year 2 Year 3 3.5% 5.429% (h) 9.199% 7.005% (hh) (hhh) 4.445% (1) 5.735% (hl) 7.531% (hhl) 4.696% (11) 6.166% (hll) 5.048% The annual spot rates for different maturities are presented in the following table. 1 Year 2 Years 3 Years 4 Years - 3.5% 4.2147% 4.7345% 5.2707% andal bondesaconnab The The annual spot rates for different maturities are presented in the following table. 1 Year 2 Years 3 Years 4 Years 3.5% 4.2147% 4.7345% 5.2707% Assume that the par value is $100 and all bonds pay coupon annually. The risk-neutral probability is 50% on each leg. a. Using the binomial interest rate tree, value a callable bond with three years to maturity. The bond is callable at a call price of 102 per 100 of par at the end of year 2. The bond pays 8% coupon. Please show the bond value tree and the call decision at each node. Retain accuracy to 3 decimal places