Register
24:00
Stop
CFA Level 2 - Fixed Income - Valuation and Analysis of Bonds with Embedded Options
Advanced
1/24
When valuing a bond with an embedded call option, which of the following factors has the greatest impact on the value of the embedded option?
a.
The coupon rate of the bond, as it determines the potential savings for the issuer if the bond is called
b.
The time to maturity of the bond, since a longer maturity provides more opportunities for the bond to be called
c.
The volatility of interest rates
Advanced