- 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

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**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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