CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

When interest rates are low, the effective duration of a ______ bond is ______ than that of an otherwise comparable ______ bond.

A. putable, lower than, non-putable
B. putable, higher than, non-putable
C. callable, lower than, non-callable
Correct Answer: C

A putable bond's effective duration is very similar to that of an otherwise comparable putable bond when interest rates are low.

User Contributed Comments 1

User Comment
khalifa92 and lower if interest rates are high because the put option would be exercised.
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