Questions should be answered by building an n=10-period binomial model for the short-rate, ri,j. The lattice parameters are: r0,0=5%, u=1.1, d=0.9 and q=1-q=1/2.

1. Quiz instructions Compute the price of a zero-coupon bond (ZCB) that matures at time t=10 and that has face value 100. Submission Guideline: Give your answer rounded to 2 decimal places. For example, if you compute the answer to be 73.2367%, submit 73.24.

2. Quiz instructions Compute the price of a forward contract on the same ZCB of the previous question where the forward contract matures at time t=4. Submission Guideline: Give your answer rounded to 2 decimal places. For example, if you compute the answer to be 73.2367%, submit 73.24.

3.Compute the price of an American call option on the same ZCB of the previous three questions. The option has expiration t=6 and strike =80. Submission Guideline: Give your answer rounded to 2 decimal places. For example, if you compute the answer to be 73.2367%, submit 73.24.