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Basic Question 13 of 15
What is the value of a 2-year, 6% coupon, putable bond given the following interest rate tree?
User Contributed Comments 5
| User | Comment |
|---|---|
| vi2009 | take $100+6 instead of $99.755 since only exercisable if interest rate <6% |
| Allen88 | Thanks vi2009, I missed that. |
| shajidubai | The question has to specifically say the put price as 100. |
| ashish100 | Got in on my own on the first try! :D Haters gonna hate. Ainters gonna aint.. |
| ashish100 | Call/put price is normally par value per reading |
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
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.