Multiple Choice
A $100 face value one-year risk-free discount bond is priced at $95.The two-year discount bond is priced at $90.After one year,the two-year bond will be worth either $91 or $97.The probability of this bond moving to a price of $97 is
A) 0.37
B) 0.50
C) 0.58
D) 0.62
Correct Answer:
Verified
Correct Answer:
Verified
Q2: Suppose that the one-year and two-year
Q3: The term "no-arbitrage" class of term-structure models
Q4: "No-arbitrage" models of the interest rate differ
Q5: A $100 face value one-year risk-free discount
Q6: In the Black-Scholes framework,return volatility is assumed
Q7: If we use the Black-Scholes model for
Q8: Which of the following is not sufficient
Q9: A $100 face value one-year risk-free discount
Q10: Which of the following statements is implied
Q11: "Equilibrium" models of the term-structure<br>A)Are general equilibrium