Answer: 16

**Correct Answer: C** In a binomial tree with n periods, the total number of possible paths is 2^n. For a 4-year bond: - Number of periods = 4 - Total paths = 2^4 = 16 Each path represents a unique sequence of interest rate movements (up or down) through the binomial tree over the 4-year period.

Author: LeetQuiz Editorial Team