Contingent claim risk liability, explained, corporate, 2011

DarienHacker

in Curriculum EOC

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?

ll11

Their answer is wrong in my opinion, but that's what they want.

NO EXCUSES

Roflnadal

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.