Bond Features Maturity (years) Face Value Coupon Rate- Coupon dates (Annual) Market interest rate today Time to call (years) Price if Called Market interest rate in Year 3 $1,000 7.00% 7.00% $1,070.00 5.00% The above bond is callable in 3 years, when the bond is issued today, interest rates are 7.00% . In 3 years, the market interest rate is 5.00% . Should the firm call back the bonds in year 3 and if so, how much would the firm save or lose by calling back the bonds? O yes it should call back the bonds, it will save $32.81 O yes it should call back the bonds, it will save $33.80 O yes it should call back the bonds, it will save $31.17 no it should not call back the bonds, it will lose $31.17 no it should not call back the bonds, it will lose $33.80 no it should not call back the bonds, it will lose $32.81