Using the information provided at the beginning of this chapter, price a 3-year callable bond with coupon rate 5% and strike price at par. There is also a lockout period through which the option cannot be exercised until t =1.

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The Answer of Using the information provided at the beginning of this chapter, price a 3-year callable bond with coupon rate 5% and strike price at par. There is also a lockout period through which the option cannot be exercised until t =1.

Using the Information Provided at the Beginning of This Chapter