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Assume the following information is given: The one year spot rate is 4.5%. Two-year, annual coupon bonds are selling at par and yield 6%. One-year

Assume the following information is given:

The one year spot rate is 4.5%. Two-year, annual coupon bonds are selling at par and yield 6%. One-year interest rate volatility is 10%. Assume an interest rate for the "down" scenario: 7%

Use Binomial Tree to calculate the Bond Value

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