Assume that the true sixmonth rate process starts at 5% and then increases or decreases by 100 basis points every six months. The probability of each increase or decrease is 50%.

A Find the riskneutral probabilities for the sixmonth rate process over the next year (i.e., two steps for a total of three dates, including today). Assume, as in the text, that the riskneutral probability of an up move from date 1 to date 2 is the same from both date 1 states.

Do this question without using price.