CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

A callable bond allows the issuer to call the bond once a year starting from year six until the bond maturity date. The call option is most likely ______.

A. an American option
B. a European option
C. a Bermuda option
Correct Answer: C

Bermuda options are a combination of American and European options. They give bondholders a contract that is less expensive than American options and not as restrictive as European options.

User Contributed Comments 2

User Comment
maryprz14 ONCE A YEAR... if you don't see this you will go for A
My mistake by the way :/
Inaganti6 Same
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