A $100 face value one-year risk-free discount bond is priced at $95.The two-year discount bond is priced at $90.After one year,the two-year bond will be worth either $91 or $97.The probability of this bond moving to a price of $97 is
A)0.37
B)0.50
C)0.58
D)0.62

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The Answer of A $100 face value one-year risk-free discount bond is priced at $95.The two-year discount bond is priced at $90.After one year,the two-year bond will be worth either $91 or $97.The probability of this bond moving to a price of $97 is
A)0.37
B)0.50
C)0.58
D)0.62

A $100 Face Value One-Year Risk-Free Discount Bond Is Priced