Interest Rate and Binomial Trees Questions Response Please answer the questions in the PDF which about fixed income securities. I expect these written assignments to be written
and formatted professionally. This means that they are free of formatting, spelling, and language
errors. Problem 1 (4 points)
Problem 2 (6 points)
Create a binomial tree given the following par curve. Assume a volatility of 20%. On your binomial
tree, price a 2-year, annual-pay bond with a coupon of 5%.
Year
Par rates (%)
1
2.00
2
3.00
Purchase answer to see full
attachment