The first number at each node in the tree below is the $0\mathrm{.}5-$year rate at that node. The second

number at each node is the price of $$1$ par of a $0\mathrm{.}5-$year zero at that node. The third number

$($if it appears$)$ is the price of $$1$ par of a $1-$year zero at that node. The fourth number $($if it

appears$)$ is the price of $$1$ par of a $1\mathrm{.}5-$year zero at that node.

The up move probability is $0\mathrm{.}5.$

Consider an $1-$year inverse floating rate note with a coupon equal to $12\%$ minus the $0\mathrm{.}5-$year

rate set $6$ months prior to the coupon date, with the additional provision that the coupon

cannot fall below $6\%($ie$)$ time $t$ coupon rate $(t),0\mathrm{.}06*$ par amount of the

note.

What is the price of the inverse floater at the up node at time $=0\mathrm{.}5($answer to four decimal

places$)$

s

What is the price of the inverse floater at the down node at time $=0\mathrm{.}5($answer to four

decimal places$)$

$

What is the price of the the inverse floater at time $=0($answer to four decimal places$)$