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Find the oas of a 3 year callable bond trading

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Find the OAS of a 3 year callable bond trading at 99.611. Assume the bond pays an annual coupon or 7.6 95, and is callable at 101.5 at the end of each year. Assume current 1 year rates are 6.7 %, and we expect them to go up or down by 1 % each year with equal probability. (Provide your answer in basis points, rounded to the nearest basis point.)

Reference no: EM133074660

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