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标题: Reading 60: Features of Debt Securities LOSe习题精选 [打印本页]
作者: honeycfa    时间: 2010-4-23 11:32     标题: [2010]Session 15-Reading 60: Features of Debt Securities LOSe习题精选

LOS e: Identify the common options embedded in a bond issue, explain the importance of embedded options, and state whether such options benefit the issuer or the bondholder.

Which of the following embedded options most likely benefits the bondholder?

A)
 Prepayment option on an amortizing security.
B)
 Put provision at par on a bond that is trading at a premium.
C)
 Interest rate cap on a floating-rate bond.

A put provision is an option that is exercisable by, and therefore potentially of benefit to, the bondholder. Even though the put is out of the money, it still has value to the bondholder. Interest rate caps and prepayment options both potentially benefit the issuer of the bond.

作者: honeycfa    时间: 2010-4-23 11:32

Which of the following embedded options benefits the bond investor?

A)
 Put provision.
B)
 Call provision.
C)
 Prepayment option.


A put provision allows the investor to put the bond back to the issuer.





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