Assets, Inc., plans to issue $8 million of bonds with a coupon rate of 6 percent, a par value of $1,000, semiannual coupons, and 30 years to maturity. The current market interest rate on these bonds is 10 percent. In one year, the interest rate on the bonds will be either 10 percent or 4 percent with equal probability. Assume investors are risk-neutral.

a.	If the bonds are noncallable, what is the price of the bonds today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Price of the bonds = _______________

b. If the bonds are callabe one year from today at $1,040, will their price be greater or less than the price you computed in part (a)?

a: greater

b: lesser