Verify that the 4-year zero-coupon bond price generated by the tree in Figure 25.5 is $0.6243.

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Derivatives Markets

ISBN: 9789332536746

3rd Edition

Authors: Robert McDonald

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Question Posted: Aug 12, 2015 03:00 AM

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Verify that the 4-year zero-coupon bond price generated by the tree in Figure 25.5 is $0.6243.

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Instead of one long equation we will work backwards In Year 3 the fouryear bond ...View the full answer

Derivatives Markets

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