Question #64

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: 19

Status: Unattempted

Part of Context Group: Q63-64
Shared Context
- Compute V0, the value of the bond at node 0. A) $104.76. B) $99.07. C) $101.35.
Question
Assume that the bond is putable in one year at par ($100) and that the put will be exercised if the computed value is less than par. What is the value of the put option?
Answer Choices:
A. $0.42
B. $1.86
C. $3.70
No explanation available for this question.
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