a. explain what is meant by arbitrage-free valuation of a fixed-income instrument;

b. calculate the arbitrage-free value of an option-free, fixed-rate coupon bond;

c. describe a binomial interest rate tree framework;

d. describe the backward induction valuation methodology and calculate the value of a fixed-income instrument given its cash flow at each node;

f. compare pricing using the zero-coupon yield curve with pricing using an arbitrage-free binomial lattice;

e. describe the process of calibrating a binomial interest rate tree to match a specific term structure;

g. describe pathwise valuation in a binomial interest rate framework and calculate the value of a fixed-income instrument given its cash flows along each path;

h. describe a Monte Carlo forward-rate simulation and its application.