Question: Exercise 23.2.6 (1) Based on the sample term structure and its associated binomial interest rate tree in Fig. 23.8, what is the next baseline rate

Exercise 23.2.6 (1) Based on the sample term structure and its associated binomial interest rate tree in Fig. 23.8, what is the next baseline rate if the four-period spot rate is 4.4%? (2) Confirm Theorem 23.2.2 by demonstrating that the baseline rate produced by Eq. (23.4) is smaller than the one derived in (1).

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