Question: At one point, certain U.S. Treasury bonds were callable. Consider the prices in the following three Treasury issues as of May 15, 2021: 05/15/2020 6.20

At one point, certain U.S. Treasury bonds were callable. Consider the prices in the following three Treasury issues as of

May 15, 2021: 05/15/2020 6.20 108.53125 108.59375 .31250 3.170

05/15/2020 7.25 109.06250 109.12500 .09375 3.990

05/15/2020 8.00 114.12500 114.31250 .46875 2.980 The bond in the middle is callable in February 2022.

What is the implied value of the call feature? Assume a par value of $1,000. (Hint: Is there a way to combine the two noncallable issues to create an issue that has the same coupon as the callable bond?) (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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