American_Bankers_Association
CTFA · Question #304
The call-option value of a callable bond is likely to be high when:
The correct answer is A. Interest rates are volatile. See the full explanation below for the reasoning.
Question
The call-option value of a callable bond is likely to be high when:
Options
- AInterest rates are volatile
- BInterest rates are low and expected to remain low
- CInterest rate are high and expected to remain high
- DMarkets are inefficient
How the community answered
(26 responses)- A81% (21)
- B12% (3)
- C4% (1)
- D4% (1)
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