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Basic Question 13 of 16

If interest rates goes down, which embedded option will benefit bondholders?

A. call options
B. put options
C. extension options
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User Contributed Comments 1

User Comment
connor15 Investors purchase extendable bonds in order to take advantage of changing interest rates without assuming the risk involved with a long-term bond.
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

Learning Outcome Statements

describe fixed-income securities with embedded options;

CFA® 2025 Level II Curriculum, Volume 4, Module 28.