Price a convertible bond with par=$1000, conversion ratio=20, annual coupon rate=10.1%, and 2 years to maturity. The bond is callable at 103% par in year 1, and convertible from year 1 through maturity.

Assume annual compounding, a constant one-year discount rate of 10%, and the following binomial model for stock price evolution.

t = 0	t = 1	t = 2
		75.87
	59.91
51.76		51.76
	43.07
		33.92