header bg

Scan QR code or get instant email to install app


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

A Higher yield.

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.


Leave a Reply

Your email address will not be published.