Multiple Choice
What is the relationship between the price of a straight bond and the price of a callable bond?
A) The straight bond's price will be higher than the callable bond's price for low interest rates.
B) The straight bond's price will be lower than the callable bond's price for low interest rates.
C) The straight bond's price will change as interest rates change, but the callable bond's price will stay the same.
D) The straight bond and the callable bond will have the same price.
E) There is no consistent relationship between the two types of bonds.
Correct Answer:
Verified
Correct Answer:
Verified
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