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Instructions: Term Structure Models Questions 16 should be answered by building an ZN-period binomial model for the short-rate, Ii,j. The lattice parameters are: 10,0 :

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Instructions: Term Structure Models Questions 16 should be answered by building an "ZN-period binomial model for the short-rate, Ii,j. The lattice parameters are: 10,0 : 5%,11: 1.1, d : 0.9 and q : 1 q : 1J2. 1. Question 1 Compute the price at a zero-coupon bond (ZCB) that matures at tine f=1El and that has lace value 100. Submission Guideline: Give yolu' answer rounded to 2 decimal places. For example, if you compute the answer to be 73236293, submit 73.24. 2. Question 2 Compute [he price oi a toward contract on me same ZCB of me previous question where [he [onward connect mature: at line i=4. Submission Guideline: Give you- answer rounded to 2 decimal places. For example, if you compute the answer to be 73236293, submit 73.24

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