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Basic Question 9 of 24
When interest rates are low, the effective duration of a ______ bond is ______ than that of an otherwise comparable ______ bond.
B. putable, higher than, non-putable
C. callable, lower than, non-callable
A. putable, lower than, non-putable
B. putable, higher than, non-putable
C. callable, lower than, non-callable
User Contributed Comments 1
| User | Comment |
|---|---|
| khalifa92 | and lower if interest rates are high because the put option would be exercised. |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
explain why effective duration and effective convexity are the most appropriate measures of interest rate risk for bonds with embedded options
calculate the percentage price change of a bond for a specified change in benchmark yield, given the bond's effective duration and convexity
CFA® 2025 Level I Curriculum, Volume 4, Module 13.