Which One of the Following Statements Related to a Put

question 93

Multiple Choice

Which one of the following statements related to a put bond is correct?

• A) Put bonds are generally redeemed at a premium over par value.
• B) Put bonds can be redeemed at any time once the put protection period has elapsed.
• C) The put feature effectively sets the ceiling price for the bond.
• D) The put feature helps protect bondholders from the risk associated with rising interest rates.
• E) A putable bond is generally priced lower than a comparable nonputable bond.

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Definitions:

Absolute Surety

A guarantee without conditions or limitations, ensuring complete assurance or certainty.

Subrogee

A party that assumes the legal rights of another (the subrogor) to make claims or enforce rights, typically in insurance cases.

Financing Statement

A document filed to give public notice that a lender has a security interest in a borrower's personal property.

Effective

In force or operational; commonly refers to the date on which a law, regulation, or agreement is applied or becomes operational.