Calculate the price of the 2-year 57 option-free
Using a 50%; 50% probabilities binary-interest-rate-tree model, and the following assumptions, r0 = 4.000% rL = 5.500% rH = 6.718% volatility = 10%
Calculate the price of the 2-year 5.7% option-free bond.
Please show your work.
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