Build a two-period (recombining) binomial tree for the normal model (Page 219 , equation (11.1)) with r0=4.5%,=1%,t=1/2 and P(2t)=955. 1.1 Calculate the risk-neutral probabilities for branching out (in the first period). 1.2 Calculate a t - maturity call option on 2t-maturity zero-coupon bond with strike price $978. 1.3 Explain how to hedge the option. Build a two-period (recombining) binomial tree for the normal model (Page 219 , equation (11.1)) with r0=4.5%,=1%,t=1/2 and P(2t)=955. 1.1 Calculate the risk-neutral probabilities for branching out (in the first period). 1.2 Calculate a t - maturity call option on 2t-maturity zero-coupon bond with strike price $978. 1.3 Explain how to hedge the option