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At one point, some Treasury bonds were callable. Consider the prices on the following three Treasury issues as of May 1 5 , 2 0
At one point, some Treasury bonds were callable. Consider the prices on the following three Treasury issues as of May :
tableMayMayMay
The bond in the middle is callable in February What is the implied value of the call feature? Assume a par value of $Hint: Is there a way to combine the two noncallable issues to create an issue that has the same coupon as the callable bond?Do not round intermediate calculations and round your answer to decimal places, eg
Call value
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