Assets, Incorporated, plans to issue $$8$ million of bonds with a coupon rate of $7\mathrm{.}6$

percent, a par value of $$1,000,$ semiannual coupons, and $30$ years to maturity. The

current market interest rate on these bonds is $6\mathrm{.}5$ percent. In one year, the interest rate

on the bonds will be either $8$ percent or $5$ 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$.,32\mathrm{.}16.)$

Price of the bonds

b$.$ If the bonds are callable one year from today at $$1,050,$ will their price be greater or

less than the price you computed in part $($a$)?$

Greater

Lesser