looking to get the answet for number 1

looking for the answer for question two Plz

1. Use the following interest rate tree to value bonds. The standard deviation of interest rates is 10% 9.2016% 7.1683% 5.8384% 75337% 13.4% 5.8689% 6.1680% 14 8051% 5.0500% Today Year 1 Year 3 Year 2 Bond Par Coupon rate 5% 5% 5% $100.000 $100,000 $100,000 Maturity Other description years 4 Option-free 4 Puttable at par starting at end of year 1 Callable at par starting at end of year 1 4 What is the value of the put option embedded in Bond B? What is the value of the call option embedded in Bond C? 2. Assume a 4 year maturity 5% annual coupon convertible bond is issued at par. It has conversion ratio of 20 shares of common stock for each bond of $1,000 par value. At the time of issue, the common stock trades at $40 per share. Two years after issue, the interest rates didn't change, but the common stock trades at $60 per share and the bond trades at 125.5% of par value. Answer the following assuming two years after issue. a) What is the conversion value of the bond? b) What is the market conversion price per share? c) What is the value of the conversion option embedded in the bond? d) is arbitrage possible? Explain. 1. Use the following interest rate tree to value bonds. The standard deviation of interest rates is 10% 9.2016% 7.1683% 5.8384% 75337% 13.4% 5.8689% 6.1680% 14 8051% 5.0500% Today Year 1 Year 3 Year 2 Bond Par Coupon rate 5% 5% 5% $100.000 $100,000 $100,000 Maturity Other description years 4 Option-free 4 Puttable at par starting at end of year 1 Callable at par starting at end of year 1 4 What is the value of the put option embedded in Bond B? What is the value of the call option embedded in Bond C? 2. Assume a 4 year maturity 5% annual coupon convertible bond is issued at par. It has conversion ratio of 20 shares of common stock for each bond of $1,000 par value. At the time of issue, the common stock trades at $40 per share. Two years after issue, the interest rates didn't change, but the common stock trades at $60 per share and the bond trades at 125.5% of par value. Answer the following assuming two years after issue. a) What is the conversion value of the bond? b) What is the market conversion price per share? c) What is the value of the conversion option embedded in the bond? d) is arbitrage possible? Explain