A bond portfolio manager is considering three bonds-1, 2, and 3-for his portfolio. Bond 1 allows the issuer to call the bond before the stated maturity, Bond 2 allows the investor to put the bond back to the issuer before the stated maturity, and Bond 3 contains no embedded options. The bonds are otherwise identical. The manager tells his assistant, "Bond 1 and Bond 2 should have larger nominal yield spreads to a US Treasury than Bond 3 to compensate for their embedded options." Is the manager most likely correct?