You are analyzing a bond issued by Tesla Motors. You estimate that the bond has a 40% chance of being priced at $950 and a non-callable bond has 60% chance of being priced at $1,050 one year from today. However, the bond under review is callable at any time at $1,010. What is the expected value of this bond in one year

Answer rating: 100% (QA)

To calculate the expected value of the bond in one year we need to consider the probabilities ... View the full answer