Consider a $1,000 par corporate bond with a 7% annual coupon and exactly three years until maturity that is both callable and putable according to the following schedule:

• Callable in year 1 at 102% of par; callable in year 2 at 101% of par
• Putable any time starting in year 1 at par
• Assume that both the call and put options will be exercised if it is at all profitable to do so

Using a three-period binomial pricing model with the following interest rate tree, compute the value of the bond.

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Using a three-period binomial pricing model with the following interest rate tree, compute the value of the bond.

Using a three-period binomial pricing model with the following interest rate tree, compute the value of the bond