Assuming no change in the credit risk of a bond, the presence of an embedded put option:

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A. Reduces the effective duration of the bond.

B. Increases the effective duration of the bond.

C. Does not change the effective duration of the bond.

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Fixed Income Analysis

ISBN: 9781119850540

5th Edition

Authors: Barbara S. Petitt

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Question Posted: Nov 08, 2023 04:19 AM

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Assuming no change in the credit risk of a bond, the presence of an embedded put option:

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B Increases the effective duration of the bond An embedded ...View the full answer

Fixed Income Analysis

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