CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Which embedded option is most beneficial to a bond issuer?
A. A conversion privilege
B. A floor on a floating rate bond
C. An accelerated sinking fund provision
Explanation: An accelerated sinking fund provision gives the issuer an option to retire more than the sinking fund requirement. The other embedded options benefit bondholders.

User Contributed Comments 2

User Comment
ascruggs92 I'd see conversion privilege as a benefit to the issuer considering it gives them a lower interest rate and a chance at not having to pay back the principal
sevywonder @ascruggs92 you're right, but they're asking MOST beneficial
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