1 For an IBM bond with 6 coupon rate (annual coupon poayment), two year to maturity, par value of $1,000, and selling at $1018 Assume that one year rates undergo a lognormal random walk with volatility , and is assumed to be 12 It is given that the one year spot rate today is 5 03 (a) Calculate th...

Anwers a The oneyear forward rate one year from now in a low state can be calculated using the binomial model The binomial model assumes that the shor ...

1. For an IBM bond with 6% coupon rate (annual coupon poayment), two year to maturity,...

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1. For an IBM bond with 6% coupon rate (annual coupon poayment), two year to maturity,...

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