Question
Given the following information: Current Interest Rate is 3% There are 3 different scenarios: Interest Rate can stay the same at 3% with probability
Given the following information: Current Interest Rate is 3% There are 3 different scenarios: Interest Rate can stay the same at 3% with probability 0.15 or increase to 5% with probability 0.17 or decrease to 1% with probability 0.68 Bond's information: Maturity is 23 years Coupon is 3%, paid annually Par value is $1,000 Call Price is $1,019 If the bond can be called immediately, the price of the callable bond is $ If there is a call protection period of 14 year(s), the price of the callable bond is $
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
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