Question: Use the maximum constraint approach. g. Using the binomial interest rate tree, show at each node the put option values of the putable bond (PP

Use the maximum constraint approach.

g. Using the binomial interest rate tree, show at each node the put option values of the putable bond (PP = 99). Given your put option values, determine the values at each node of the putable bond as the sum of the option-free bond values found in Question 1.b and the put option values. Do your putable bond values match the ones you found in Question 1.f?

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