CFA Practice Question

There are 252 practice questions for this study session.

CFA Practice Question

Relative to that of the straight bond,

  • The call option ______ the effective duration of the callable bond.
  • The put option ______ the effective duration of the putable bond.

A. reduces, raises
B. raises, reduces
C. reduces, reduces
Explanation: They both reduce the effective duration of the bond with embedded options.

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