Given a current one-period spot rate of S0 = 10%, u = 1.1, d = .9091, and

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Given a current one-period spot rate of S0 = 10%, u = 1.1, d = .9091, and q

= .5, determine the value of the two-period, option-free 9% coupon bond in Question 1 as the weighted average value of the possible paths defined by the binomial process. Does the value match the value you obtained in Question 1.b?

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