1. Price a 3 month call using a one step binomial tree where the risk free rate is 2.48%. Where S₀ is $50, the strike price is 52 and it can increase or decrease by 10% with equal probability. Please use 4 decimal places in your response.

Note: The correct answer is 1.5832. Please explain.

2. Calculate duration of a one year semiannual 4% coupon bond, 1000 par, with a 5% YTM. For this question find all answers to at least the 6^th decimal place. Us this infrmation to calculate the price of this bond. Use the bond's price to calculate the duration of the bond. Please fill in below your answer for the bond's duration.

Note: The correct answer is 0.9901. please explain?