Build an n = 10 binomial model for the short rate with the following parameters:

r_0,0= 5%

u = 1.1

d = 0.9

q = 1 - q =

Assume that the 1-step hazard rate in node(i,j) is given by h_ij = ab^{j -} where:

a=0.01

b=1.01

Compute the price of a zero-coupon bond with face valueF=100and recoveryR=20%.