- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 42. Fixed-Income Securities: Defining Elements
- Subject 5. Bonds with Contingency Provisions
CFA Practice Question
Which statement regarding the strike price of different embedded options is true?
A. The call price is usually equal to the par value.
B. The selling price of a put option is usually equal to the par value.
C. When a convertible bond is issued the conversion value is usually higher than the bond price.
Explanation: There is usually a premium over par for a callable bond.
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