Bond Features
Maturity (years)	5
Face Value =	$1,000
Coupon Rate =	3.00%
Coupon dates (Annual)
Market interest rate today	3.00%
Time to call (years)	3
Price if Called	$1,030.00
Market interest rate in Year 3	1.00%

The above bond is callable in 3 years. When the bond is issued today, interest rates are 3.00% . In 3 years, the market interest rate is 1.00% . Should the firm call back the bonds in year 3 and if so, how much would the firm save or lose by calling back the bonds?

A.	yes it should call back the bonds, it will save $8.94

B.	yes it should call back the bonds, it will save $9.69

C.	no it should not call back the bonds, it will lose $9.69

D.	no it should not call back the bonds, it will lose $8.94

E.	yes it should call back the bonds, it will save $9.41

F.	no it should not call back the bonds, it will lose $9.41