Investment Vehicles第 38 / 110 题
Which risk is most directly associated with owning a callable bond?
a.The bond can never be redeemed early
b.Reinvestment risk is eliminated
c.The issuer may redeem it early when rates fall, forcing reinvestment at lower yields
d.The coupon automatically increases when the bond is called
解析
A callable bond lets the issuer redeem it before maturity, and issuers tend to call bonds when interest rates fall so they can refinance at lower cost. This exposes the investor to reinvestment risk, having to reinvest proceeds at lower prevailing yields. Call features therefore favor the issuer.
免费刷完整 110 道题库 — 无需注册。
同考点相关题目
- An American Depositary Receipt (ADR) allows a U.S. investor to do which of the following?
- Yield to maturity (YTM) of a bond takes into account which of the following that current yield ignores?
- A unit investment trust (UIT) differs from a mutual fund primarily because a UIT:
- A money market fund seeks to maintain which of the following characteristics?
- A futures contract obligates the parties to do which of the following?
- A high-yield (junk) bond is best characterized by which of the following?