Q4

Price a 3-year, 6% annual coupon bond, using the following interest rate tree for one-year rates. Assume annual compounding. Par is 100 . Both states have equal probabilities of happening. Round your answer to 2 decimal places. For example, if your answer is 25.689, please write down 25.69. t=0t=1t=2 r_2. HH= 8.167% r 1,H= 4.646% rO=2.000%r2,HL=6.050% r1,L= 3.442% r,LL= 4.482% Question 4 1 pts What is the value of the bond (with coupon payment included) in node r1.L using the example above? Round your answer to 2 decimal places. For example, if your answer is 25.689, please write down 25.69