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Basic Question 4 of 15
The higher the interest rate volatility, the ______ the value of the bond call option and the ______ the value of the bond put option.
B. lower, lower
C. lower, higher
D. higher, lower
A. higher, higher
B. lower, lower
C. lower, higher
D. higher, lower
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Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
explain how interest rate volatility affects the value of a callable or putable bond;
explain how changes in the level and shape of the yield curve affect the value of a callable or putable bond;
calculate the value of a callable or putable bond from an interest rate tree;
CFA® 2025 Level II Curriculum, Volume 4, Module 28.