1. Price interest rate options under the Ho-Lee binomial tree model: Ar, = oAt + ovat er, EB2 = where 0=0.005, 0=0.0075 and At=0.5. Assume that today is October 15, 2021. 1.1. Assume that the current zero-coupon yield curve for semi-annual compounding is flat at 2.95%. Price a call on a coupon bond with the following characteristics: Underlying: 3s of October 15, 2031 Maturity: Strike: PAR 1.2. Let the flat yield curve vary from 0.5% to 6% with increment size 0.5%, compute and plot the option values against the yields. 1.3. Given that the quarterly compounding zero-coupon yield be flat at 2.939%, can you redo problem 1.1 and 1.2 for At = 0.25 ? 5 years 1. Price interest rate options under the Ho-Lee binomial tree model: Ar, = oAt + ovat er, EB2 = where 0=0.005, 0=0.0075 and At=0.5. Assume that today is October 15, 2021. 1.1. Assume that the current zero-coupon yield curve for semi-annual compounding is flat at 2.95%. Price a call on a coupon bond with the following characteristics: Underlying: 3s of October 15, 2031 Maturity: Strike: PAR 1.2. Let the flat yield curve vary from 0.5% to 6% with increment size 0.5%, compute and plot the option values against the yields. 1.3. Given that the quarterly compounding zero-coupon yield be flat at 2.939%, can you redo problem 1.1 and 1.2 for At = 0.25 ? 5 years