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Question:

Which of the following is an advantage of a callable bond (compared to an identical option-free bond) to an investor?

A Higher yield.
explanation

An issuer of a callable bond must compensate the bondholder when the issue is sold by offering a higher coupon rate or accepting a lower price than if the call feature was not included. Convexity will typically be much less than for an option-free bond, and reinvestment risk is greater for callable bonds.

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