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Basic Question 12 of 15

All else being equal, the value of a callable bond is the highest if the yield curve is:

A. upward sloping.
B. flat.
C. downward sloping.
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User Contributed Comments 1

User Comment
Stoibayev The answer seems inconclusive.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

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.