Find the price of a forward contract on the same zcb

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building an n = 10 - period binomial model for the short - rate, ri,j . The lattice parameters are: r0,0 = 5%, u = 1.1, d = 0.9 and q = 1- q = 1/2.

Question 1: Compute the price of a zero - coupon bond (ZCB) that matures at time t = 10 and that has face value 100.

Question 2: Compute the price of a forward contract on the same ZCB of the previous question where the forward contract matures at time t = 4.

Reference no: EM132581960

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