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0.08 0.07 0.06 10.06 0.05 0.04 Use the annual interest rate lattice above to answer this question. Assume that all interest rates are continuously compounded

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0.08 0.07 0.06 10.06 0.05 0.04 Use the annual interest rate lattice above to answer this question. Assume that all interest rates are continuously compounded and risk-neutral probability q=0.5. Suppose that there exists a callable bond that matures in 2 years with a par value of 100 and a coupon rate of 10%. The bond can be called anytime at a price of $108. What is the price of the callable bond? 101.23 106.98 99.45 114.53

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