The Option Adjusted Duration Will Approach the Duration to Maturity

question 91

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 these are correct.

---

Definitions:

Legal Immigrants

Individuals who have been granted the right to live permanently and work in a country other than their own, in accordance with that country's immigration laws.

India

A country in South Asia, known for its diverse culture, languages, geography, and as the world's largest democracy.

North Korea

A country in East Asia, officially known as the Democratic People's Republic of Korea, known for its totalitarian government and isolation from much of the international community.

Economic Immigrants

International migrants who have moved from one country to another to obtain economic gains such as better employment opportunities.