CFA Practice Question

There are 252 practice questions for this study session.

CFA Practice Question

A change in the assumed interest rate volatility can cause the change in the fair value of a corporate bond when:

I. there are coupons.
II. there are embedded options.
III. there is credit risk.
Correct Answer: II and III

Regarding credit risk, there is a small impact of interest rate volatility on the fair value of the corporate bond, as illustrated in the reading.

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