CFA Practice Question

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CFA Practice Question

Shaker Chin has an 11.000%, four year bond that is selling for a price of $98.432 and is currently yielding 11.50%. Its duration is 3.01 and its convexity is -3.29. The bond is likely to be a ______.
A. traditional option-free bond
B. callable bond
C. putable bond
Explanation: Notice that the bond has a negative convexity.

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