callable bond will typically have a ________ yield than an otherwise identical bond without a call feature because ________. A) lower, the firm loses flexibility with a callable bond B) higher, the firm loses flexibility with a callable bond
callable bond will typically have a ________ yield than an otherwise identical bond without a call feature because ________. A) lower, the firm loses flexibility with a callable bond B) higher, the firm loses flexibility with a callable bond
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A callable bond will typically have a ________ yield than an otherwise identical bond without a call feature because ________.
- A) lower, the firm loses flexibility with a callable bond
- B) higher, the firm loses flexibility with a callable bond
- C) lower, the option to call a bond is valuable
- D) higher, the option to call a bond is valuable
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