Use the interest rate tree below. The first number at each node is the 0.5-year rate at that node. The next number is the price of $1 par of a 0.5-year zero at that node. The next number, at the time 0 node, is the price of $1 par of a 1-year zero.

a) What is the value of a 5.25% interest rate cap on $100 notional amount of a 1-year semi-annual floating rate note? b) What is the value of $100 par of a 1-year semi-annual floating rate note that is capped at 5.25%?

Please explain

Time 0 Time 0.5 5.526% 0.973113 4.9% 0.976086 0.952587 Interest Rate Model 4.345% 0.978737