a. In terms of option theory, explain the impact on the offering yield of adding a call

Question:

a. In terms of option theory, explain the impact on the offering yield of adding a call feature to a proposed bond issue.
b. Explain the impact on both bond duration and convexity of adding a call feature to a proposed bond issue. Assume that a of corporate bonds is managed to maintain targets for modified duration and convexity.
c. Explain how the could include both callable and noncallable bonds while maintaining the targets.
d. Describe one advantage and one disadvantage of including callable bonds in this Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...