Option Adjusted Duration Can Be Calculated as

question 90

Multiple Choice

Option adjusted duration can be calculated as

• A)Duration of noncallable bond - duration of call option on the bond.
• B)Duration of noncallable bond + duration of call option on the bond.
• C)Duration of callable bond - duration of call option on the bond.
• D)Duration of callable bond + duration of call option on the bond.
• E)None of the above.

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Definitions:

Positive Effect

A beneficial or favorable outcome or impact of a particular event, action, or policy.

Stock Prices

The cost at which a share of a company can be bought or sold on the stock market.

Dividends

Money paid out to shareholders by a corporation, usually as a share of profits.

Retained Earnings

Profits that a company keeps or reinvests, rather than distributing to stockholders as dividends.