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The Position of a Bondholder That Is Long a Callable

Question 28

Multiple Choice

The position of a bondholder that is long a callable bond is equal to being


A) long a noncallable bond + long a call option on the bond.
B) long a noncallable bond + short a call option on the bond.
C) short a noncallable bond + long a call option on the bond.
D) short a noncallable bond + short a call option on the bond.
E) None of these are correct.

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