Question
EXHIBIT 1 Fixed-Rate Bonds Issued by Pro Star, Inc. Bond Maturity Coupon Type of Bond Bond #1 1 October 20X3 4.40% annual Option-free Bond #2
EXHIBIT 1 Fixed-Rate Bonds Issued by Pro Star, Inc.
| Bond | Maturity | Coupon | Type of Bond |
| Bond #1 | 1 October 20X3 | 4.40% annual | Option-free |
| Bond #2 | 1 October 20X3 | 4.40% annual | Callable at par on 1 October 20X1 and on 1 October 20X2 |
| Bond #3 | 1 October 20X3 | 4.40% annual | Putable at par on 1 October 20X1 and on 1 October 20X2 |
The bond that would most likely protect investors against a significant increase in interest rates is:
| A. | Bond #1 | |
| B. | Bond #2 | |
| C. | Bond #3 |
EXHIBIT 1 Fixed-Rate Bonds Issued by Pro Star, Inc.
| Bond | Maturity | Coupon | Type of Bond |
| Bond #1 | 1 October 20X3 | 4.40% annual | Option-free |
| Bond #2 | 1 October 20X3 | 4.40% annual | Callable at par on 1 October 20X1 and on 1 October 20X2 |
| Bond #3 | 1 October 20X3 | 4.40% annual | Putable at par on 1 October 20X1 and on 1 October 20X2 |
The call feature of bond #2 is best described as:
| A. | European style | |
| B. | American style | |
| C. | Bermudan style |
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The New Managed Account Solutions Handbook
Authors: Stephen D. Gresham, Arlen S. Oransky
1st Edition
0470222786, 978-0470222782
