1. An analyst calculates the price of a 6% annual pay coupon bond with a tenor of 3 years using the following interest rate tree:

0y1		1y1		2y1
				4.39%
		3.49%
2.50%				3.25%
		2.58%
				2.41%

Using the interest rate tree above, compute the value of a callable bond with an annual coupon of 3% and a tenor of 3 years.