r00=5%, u=1.1 d=0.9 q=1-q=0.5 Compute the initial value of a forward-starting swap that begins att=1, with maturityt=10and a fixed rate of 4.

r00=5%, u=1.1 d=0.9 q=1-q=0.5

Compute the initial value of a forward-starting swap that begins att=1, with maturityt=10and a fixed rate of 4.5%. (The first payment then takes place att=2and the final payment takes place att=11as we are assuming, as usual, that payments take place in arrears.) You should assume a swap notional of 1 million and assume that you receive floating and pay fixed.)

Compute the initial price of a swaption that matures at time t= and has a strike of 0. The underlying swap is the same swap as described in the previous question with a notional of 1 million. To be clear, you should assume that if the swaption is exercised at t= then the owner of the swaption will receive all cash-flows from the underlying swap from times t= to t= inclusive. (The swaption strike of 0 should also not be confused with the fixed rate of 4.5% on the underlying swap.)

The attachment is what i got before plugging in 1 million. I think it should be correct. However, I still failed to get the correct answer by multiplying the rate at t=0 by 1,000,000. Do I have to discount it again for payment at t =1?

the two incorrect answers i got: 38136, 122270