- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 29. The Arbitrage-Free Valuation Framework
- Subject 2. The Basics of Creating a Binomial Interest Rate Tree
CFA Practice Question
In a binomial interest rate tree, when the number of period is 3, there are ______ possible rates and logarithmic returns at period 3.
A. 3
B. 4
C. 9
Explanation: n + 1 = 4
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