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This question relates to Problem 1. Which of the assumptions regarding the construction of ABBonds' binomial model interest rate trees is most accurate? Hint: Think

This question relates to Problem 1. Which of the assumptions regarding the construction of ABBonds' binomial model interest rate trees is most accurate? Hint: Think of the properties of the binomial interest rate model. Assumption 1 only. Assumption 2 only. Neither assumption is correct. Both assumptions are correct

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