Question #30
Reading: Reading 27 Valuation and Analysis of Bonds With Embedded Options
PDF File: Reading 27 Valuation and Analysis of Bonds With Embedded Options.pdf
Page: 8
Status: Correct
Correct Answer: A
Question
Joseph Dentice, CFA is evaluating three bonds. All three bonds have a coupon rate of 3%, maturity of five years and are generally identical in every respect except that bond A is an option-free bond, bond B is callable at any time at par and bond C is putable at any time at par. Yield curve is currently flat at 3%. The bond with the lowest one-sided down-duration is most likely to be:
Answer Choices:
B. Bond
C. Bond C
No explanation available for this question.