This question is on page 376. Given the following information: PAR RATES:
1-year - 2.250%
2-year - 2.750%
3-year - 3.100%
The binomial interest rate tree is already given in the example. I got most of the problem right but in Y0, they value the bond using a rate of 2.250, in the binomial interest rate tree exhibit they give us, Y0 is 2.5000%. Which one is right?