One Year 2.00% Two Year 3.25% Three Year 4.50% Four Year 5.00% Five Year 4.25% YTM III. Application: 9. Assume you are a small business lender for a bank located on Pearl Street and the yields you charge today to your business customers are in the matrix above. For example, if a borrower came in today for a two-year loan, you would quote her 3.25%. Suppose a local builder approaches you for a construction loan for $3,000,000, but tells you that due to the delays in construction permits issued by Boulder County, construction will not begin until one year from today. This is a builder who has good credit but is asking you to quote an interest rate for a 3-year $3,000,000 loan but will not take out the loan until one year from today once Boulder permitting is complete. What is your quote (assume no liquidity premium)? One Year 2.00% Two Year 3.25% Three Year 4.50% Four Year 5.00% Five Year 4.25% YTM III. Application: 9. Assume you are a small business lender for a bank located on Pearl Street and the yields you charge today to your business customers are in the matrix above. For example, if a borrower came in today for a two-year loan, you would quote her 3.25%. Suppose a local builder approaches you for a construction loan for $3,000,000, but tells you that due to the delays in construction permits issued by Boulder County, construction will not begin until one year from today. This is a builder who has good credit but is asking you to quote an interest rate for a 3-year $3,000,000 loan but will not take out the loan until one year from today once Boulder permitting is complete. What is your quote (assume no liquidity premium)