Assuming No Change in the Credit Risk of a Bond

question 2

Multiple Choice

assuming no change in the credit risk of a bond, the presence of an embedded put option:

• A) reduces the effective duration of the bond.
• B) increases the effective duration of the bond.
• C) does not change the effective duration of the bond.

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Definitions:

Environmental Factor

Any external element that can influence an organism's development, health, behavior, or survival.

Susceptibility

The state of being likely to be influenced or harmed by a particular thing or condition.

Serious Illness

A health condition that poses a significant threat to an individual's life or well-being, often requiring extensive medical care or intervention.

School-Age Children

Children who are in the age range typically associated with attending elementary and middle school, roughly ages 6 through 12.