Question: 1 point 3 . Quiz instructions Construct an = 10 - period binomial model for the short- rate , Mi.j . The lattice parameters are

1 point 3 . Quiz instructions Construct an = 10 - period binomial model for the short- rate , Mi.j . The lattice parameters are : 10, 0 = 5%, 4 = 1 . 1 , d = 0. 9 and 9 = 1 - 9 = 1/ 2. This is the same lattice that you constructed in Assignment 5 . Assume that the 1 - step hazard rate in node ( 1 , 1 ) is given by hij = abj - iz where a = O. O I and 6 = 1 . 01 . Compute the price of a zero - coupon bond with face value F = 100 and recovery R = 20%/0 . Submission Guideline : Give your answer rounded to two decimal places . For example , if you compute the answer to be 73. 2367, submit 73. 24

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