Is it possible that from some node on a binomial tree of interest rates the ensuing two
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Is it possible that from some node on a binomial tree of interest rates the ensuing two nodes both have higher interest rates than the current node? Construct an example to show that this is possible or explain why it is impossible.
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Let the current interest rate be ro and the two following nodes after time h are denoted ru and ra w...View the full answer
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