Given the following information:

Current Interest Rate is 3%

There are 3 different scenarios:

Interest Rate can stay the same at 3% with probability 0.15

or increase to 5% with probability 0.17

or decrease to 1% with probability 0.68

Bond's information:

Maturity is 23 years

Coupon is 3% , paid annually

Par value is $1,000

Call Price is $1,019

There is a call protection period of 14 years.

a. At what interest rate will the bond be called on the first call date?

b. what is the price of the callable bond? (in 2 decimal places)