Question: Part 2 Callable Bond Use the interest rate tree given below to find the value of a callable bond and compare it to the value

Part 2 Callable Bond Use the interest rate tree given below

Part 2 Callable Bond Use the interest rate tree given below to find the value of a callable bond and compare it to the value of a non-callable bond. 0.053025 0.041596 0.020202 0.031364 0.020056 0.009932 t=0 t=0.5 t=1 1. Add 0.001 to all of the rates on the tree and value the callable bond in question 1 using this adjusted interest rate tree. Part 2 Callable Bond Use the interest rate tree given below to find the value of a callable bond and compare it to the value of a non-callable bond. 0.053025 0.041596 0.020202 0.031364 0.020056 0.009932 t=0 t=0.5 t=1 1. Add 0.001 to all of the rates on the tree and value the callable bond in question 1 using this adjusted interest rate tree

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