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Interest rate, call option
Im quoting QBank:
If interest rates fall, the:
A) value of call option embedded in the callable bond falls.
B) callable bond's price rises more slowly than that of a noncallable but otherwise identical bond.
C) callable bond's price rises faster than that of a noncallable but otherwise identical bond.
I answered B. correctly only because this is a fixed income question. But isn't A just as correct? As interest rates increase, call values rise, and vice versa.
Edited 1 time(s). Last edit at Sunday, October 25, 2009 at 10:53AM by nudge. |
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发表于 2011-7-13 16:31
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