2 questions

Table 1 displays the risk-neutral HoLee binomial tree containing the evolution of the continuously compounded one-period rates. Each period in the tree equals six months, that is A = 0.5, Where A denotes the time interval between steps. Recall that such a tree is estimated to t the original term structure of zero coupon bond prices for all maturities. We take p\" = 0-5 as the up-state probability and 1 p" = 0-5 as the down-state probability (recall these are the risk neutral probabilities, not the actual probabilities). Finally, recall the following notation: n+1\