Hello, I have two problems.

1. I have to price a callable (yearly) bond with coupon:

4*(CMS10 - CMS2)

As I hadn't a market model I'm using trees (BDT). I don't consider correlations.

I got a one year tree (BDT) and I'm thinking on how to get a 2 year tree (for CMS2) from my original tree and a 10 year tree (for CMS10). Any idea or reference? Is it possible to "compound rates" in trees?

2. I need to price a callable range accrual. As I hadn't a market model I'm using trees (BDT) again but I don't know how to count n (n=days into the range).

Thanks,