CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

All else equal, an increase in expected yield volatility is most likely to result in an increase in the price of a(n) ______.
A. putable bond
B. callable bond
C. option-free bond
Explanation: An increase in expected yield volatility increases the price of an embedded option. The price of a putable bond will increase because the price of the putable bond is equal to the price of an option-free bond plus the value of the put option.

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