We are not going to have to value a interest rate tree, but just understand how to value a bond with an embedded option given the information right?
there’s CALCULATE all over the LOS’s for interest rate trees- callable, putable, etc. they come up again also in derivatives. make them your friend- they are pretty easy to do once you practice them a few times. they could def give you info and make you do the whole backward induction calcs to get the value of a bond.
right bannisja, but not the actual tree construction, that’s beyond CFA.
thanks Dreary, thats what I meant 