Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 12 of 24
In general, an embedded option, whether it's a call option or put option, ______ the effective duration of a bond.
B. increases
C. It depends if it's a call or put option.
A. reduces
B. increases
C. It depends if it's a call or put option.
User Contributed Comments 0
You need to log in first to add your comment.
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
explain why effective duration and effective convexity are the most appropriate measures of interest rate risk for bonds with embedded options
calculate the percentage price change of a bond for a specified change in benchmark yield, given the bond's effective duration and convexity
CFA® 2025 Level I Curriculum, Volume 4, Module 13.