From the two tables given below:

TABLE 1:

Year Spot Rate:

Year 1: 3.5%

Year 2: 4.2148%

Year 3: 4.7352%

Year 4: 5.2706%

TABLE 2:

Current 1-year spot rate = 3.5%

1-year forward rate one year from now = 4.935%

1-year forward rate two years from now = 5.784%

1-year forward rate three years from now = 6.893%

Use annual compounding for both Parts. (credit only if cash flows are written correctly)

Part A: What is the PV of a 4-year 6.5% coupon bond using spot rates (use par = 100)?

Part B: What is the PV of a 4-year 6.5% coupon bond using forward rates (use par= 100)?