If market interest rates rise, the price of a callable bond, compared to an otherwise identical option-free bond, will most likely: ()
A: Increase by less than the option-free bond.
B: Decrease by less than the option-free bond.
C: Decrease by more than the option-free bond.
D: Decrease by the same amount as the option-free bond.
A: Increase by less than the option-free bond.
B: Decrease by less than the option-free bond.
C: Decrease by more than the option-free bond.
D: Decrease by the same amount as the option-free bond.
举一反三
- Is an option-free bond’s price sensitivity positively correlated with the: Bond’s coupon rate Level of market interest rates（） A: NO NO B: NO YES C: YES NO
- Relative to an otherwise similar option-free bond. a
- When you discount the future payments of a bond at a higher interest rate, you decrease the current value of the bond.
- If you have a bond that pays a lump sum at the time of maturity, it is A: called a zero-coupon bond. B: worth more than a bond with coupon payments. C: riskier than a bond with coupon payments. D: a safer investment than a perpetuity.
- In organic compounds, single bond is σ bond, only one of double bond and three bond is σ bond, the rest is π bond.