问题如下：
3. Method 1 would most likely not be an appropriate valuation technique for the bond issued by:
选项：
A.Hutto-Barkley Inc.
B.Luna y Estrellas Intl.
C.Peaton Scorpio Motors.
解释：
B is correct.
The Luna y Estrellas Intl. bond contains an embedded option. Method 1 will produce an arbitrage-free valuation for option-free bonds; however, for bonds with embedded options, changes in future interest rates impact the likelihood the option will be exercised and so impact future cash flows. Therefore, to develop a framework that values bonds with embedded options, interest rates must be allowed to take on different potential values in the future based on some assumed level of volatility (Method 2).
A and C are incorrect because the Hutto-Barkley Inc. bond and the Peaton Scorpio Motors bond are both option-free bonds and can be valued using either Method 1 or Method 2 to produce an arbitrage-free valuation.
exhibit 3 中的yield是指什么，是根据par curve计算出的spot rate的平均数吗，两者之间是否有关系或者矛盾？
