[CFA level 1模拟真题]Version 4 Questions－Q57 face, otherwise, interest, because, likely

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Q57. For a decline in interest rates, the price of a callable bond, when compared to an otherwise identical option-free bond, will most likely rise by:

A. less because the price of the embedded option falls

B. less because the price of the embedded option rises

C. more because the price of the embedded option falls

D. more because the price of the embedded option rises.

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答案和详解如下：

Q57.   B   Study Session     15-66-c

As interest rates decline, the price of the option-free bond rises. However, the price of the embedded call option also rises. Consequently, the price of a callable bond rises by less than the price of an otherwise identical option-free bond.