Question: After building a binomial interest rate tree, you have identified the following possible interest rate paths: Path y0y1 y1y1 y2y1 1 2.84 3.11 3.88 2

After building a binomial interest rate tree, you have identified the following possible interest rate paths: Path y0y1 y1y1 y2y1 1 2.84 3.11 3.88 2 2.84 3.11 2.94 3 2.84 2.39 2.94 4 2.84 2.39 1.59 Using pathwise valuation, what is the proper price for a 3 year 4.36% coupon bond?

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