A non callable corporate bond that hedge the liability of building a hospital. The answer is the investor is exposed to interest rate, cap, and contingent claim risks.
I remember someone here explained non callable corporate bond does have contingent claim risk as it has potential claim on corporate assets.
However, in 2011 CFAI mock #34. The answer says noncallable corporate bond has no contingent claim risk.
WTH?作者: Roflnadal 时间: 2011-7-11 19:49
We decided the EOC is just a general statement of what to look for when immunizing, not a specific.
Contingent claim not applicable to non-callable debt.作者: ll11 时间: 2011-7-11 19:49
Their answer is wrong in my opinion, but that's what they want.
