Hi, please give me some advise below if I am on the right track of understanding the questions below.

Bond A B C

Face Value 1000 1000 1000

Maturity(yr) 20 20 20

Coupon rate Annually 5.5 5.5 5.5

Yield to Maturity 5 5.5 3.5

special features none callable Callable and Convertible

price ? Par ?

Note : Bond B is considered identical to Bond A except for the callability provision.

Is my calculation of the price of Bond A correct?

PV_bond(PMT,FV,,YTM,n):= PV_bond(55,1000,5%,20) = -1062.31

The price of bond A is $1062.31

For the implied value of the callability provision?

would you please explain how to calculate implied value of the callability provision in question 2, I could not find any reference and sample in my textbook. Is it a number value?

I believe the callability provision benefit the issuer over the purchaser in general?

I am not sure what is this question asking "Is it consistent with the price you calculated for Bond A relative to the price of Bond B?" Can you explain if what I thought it would be is on the right track.

In my opinion, Bond B states price is Par, is that means the price is $1,000, if so the answer is yes because bond with callable feature usually offer better return.

Thank you.