What volatilities were used to construct each tree

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1. What are the 1-, 2-, 3-, 4-, and 5-year zero-coupon bond prices implied by the two trees?

2. What volatilities were used to construct each tree? (You computed zero-coupon bond prices in the previous problem; now you have to compute the year-1 yield volatility for 1-, 2-, 3-, and 4-year bonds.) Can you unambiguously say that rates in one tree are more volatile than the other?

Reference no: EM131368560

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