CFA Level II 2017 Mock PM - Q40 on Binomial Interest Rate Tree

CFA Level II
#1

Can anyone help explain how to arrive at the answer for Q40 in the recent CFA Level II 2017 Mock Exam PM?

I got $99.35, instead of the $100.908 answer given

#2

Is it because it’s a 4 year tree instead of a 3 year tree, and hence should be discounted with rates up until “Year 2” only?

if it is, the labelling is very confusing and IMO is a bad question meant to be confusing

#3

yes the 3-year rates are a trap.

#4

Trap??!! What sorcery??!!

Anyways, yeah thanks Edbert for pointing it out