- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 30. Valuation and Analysis of Bonds with Embedded Options
- Subject 3. Valuation of Default-Free Callable and Putable Bonds
CFA Practice Question
As interest rate volatility increases,
A. The value of bond embedded call/put options decreases.
B. The value of a callable bond decreases.
C. The OAS for a callable bond increases.
Explanation: The value of a putable bond increases but the value of a callable bond decreases.
User Contributed Comments 0
You need to log in first to add your comment.