bond maturing

1. Assume that the interest rate today is 6%. In the binomial tree model for interest rates with p = 0.5, u = 1.1, and d = 0.9, price the put option [0.95 – P(1, 2)] + with maturity T = 1, on the bond maturing at time T = 2.
2. The price of three-month and nine-month T-bills are $98.788 and $96.270, respectively. In our model of the term structure, three months from today the six-month interest rate will be either 5.5% or 5% (in equivalent annual terms). Compute the price of a three-month European put written on the nine-month pure discount bond, with strike price $97.5.