The Option Adjusted Duration Will Approach the Duration to Maturity,when

question 100

Multiple Choice

The option adjusted duration will approach the duration to maturity,when

• A) Interest rates are significantly above the coupon rate because the option has very little chance of being called, and the call option will have very little value.
• B) Interest rates are significantly below the coupon rate because the option has very little chance of being called, and the call option will have very little value.
• C) Interest rates are significantly above the coupon rate because the option has a high chance of being called, and the call option will have significant value.
• D) Interest rates are significantly below the coupon rate because the option has a high chance of being called, and the call option will have significant value.
• E) None of the above.

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Definitions:

Hydrolytic Destruction

A chemical process in which water is used to break down compounds, often leading to the breakdown or degradation of materials.

Cell Necrosis

A form of cell injury leading to the premature death of cells in living tissue by autolysis.

Glycoprotein

A protein with covalently attached carbohydrates

Golgi Stacks

A structure within the cell composed of a series of flattened membrane sacs involved in the modification, sorting, and packaging of proteins.