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Question 3 (2 marks). Assume the following information is given: The one year spot rate is 4.5%. Two-year, annual coupon bonds are selling at par

Question 3 (2 marks). Assume the following information is given: The one year spot rate is 4.5%. Two-year, annual coupon bonds are selling at par and yield 6%. One-year interest rate volatility is 10%. interest rate for the "down" scenario: 7% Use Binomial Tree to calculate the Bond Value

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