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Basic Question 0 of 2

An option free bond is trading at $105. Which price is LEAST LIEKLY for a callable bond with the same maturity and credit risk?

A. $102
B. $104
C. $106
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User Contributed Comments 1

User Comment
pingpong Investors get a discount for a callable bond. Investors are willing to pay a premium for a putable bond.
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Your review questions and global ranking system were so helpful.
Lina

Lina

Learning Outcome Statements

explain how interest rate volatility affects the value of a callable or putable bond;

explain how changes in the level and shape of the yield curve affect the value of a callable or putable bond;

calculate the value of a callable or putable bond from an interest rate tree;

CFA® 2026 Level II Curriculum, Volume 4, Module 28.