Question: At one point, some Treasury bonds were callable Consider the prices on the following three Treasury issues as of May 15, 2016 7.15 May 20
At one point, some Treasury bonds were callable Consider the prices on the following three Treasury issues as of May 15, 2016 7.15 May 20 n 114.375e 114.43750-,43750 5.41 8.90 May 20111.50000 111.56250 18750 5.37 12.65 May 20147-65625 147.84375 5000045 The bond in the middle is callable in February 2017. 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 Intermedlate calculations. Round your answer to 2 decimal places, e.g. 32.16.) Call value $
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