Because of the lognormal distribution, interest rates on adjacent nodes of the binomial tree are multiples of

	A.	e
	B.	e
	C.	e2

For bonds that are option-free, the arbitrage-free value is simply

	A.	the present value of expected future values using the benchmark spot rates.
	B.	the present value of expected futures values using the yield to maturity.
	C.	the present value of a treasury bill of similar denomination.