Suppose the 1-year spot rate is 1.2%, and that a 2-year 1.5% annual coupon, a 3-year 1.7% annual coupon bonds are trading at par ($100).

Calibrate a 2-year binomial interest rate model, assuming that interest volatility sigma is10%. What is the lowest rate at t=2?

Assume annual compounding. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321