- CFA Exams
- CFA Level I Exam
- Study Session 13. Fixed Income (2)
- Reading 34. Valuation and Analysis of Bonds with Embedded Options
- Subject 1. Overview of Embedded Options
CFA Practice Question
A death put option can be used to protect investors against:
A. rising interest rates.
B. flat interest rates.
C. falling interest rates.
Explanation: The death put option protects the bondholder's estate if the bondholder dies and interest rates are higher than when the bond was originally purchased.
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