Detailed answer on excel please

2. Binomial Interest Rate Thee - 30 points Use the following interest rate tree to answer the quentions. The probability of moving up or down on the tree is the same. Assume for simplicity that each step is one year. 1 (a) Compute the price of a 1-, 2-, and 3-year zero coupon bond. (b) Compute the swap rate, C, for a plain vanilla swap with annual cash flows and maturing on t=3. Recall the cash flows are given by CFij(t+1)=N(rij(1)C), where rij(1)=eri,j1 is the annually compounded rate that corresponds to rt,j. 2. Binomial Interest Rate Thee - 30 points Use the following interest rate tree to answer the quentions. The probability of moving up or down on the tree is the same. Assume for simplicity that each step is one year. 1 (a) Compute the price of a 1-, 2-, and 3-year zero coupon bond. (b) Compute the swap rate, C, for a plain vanilla swap with annual cash flows and maturing on t=3. Recall the cash flows are given by CFij(t+1)=N(rij(1)C), where rij(1)=eri,j1 is the annually compounded rate that corresponds to rt,j