Asked by Minmint Vanichvorasakul on Apr 24, 2024
A(n) ____________ bond is often putable and has a "collar".
A) Floating rate.
B) Act of god.
C) Zero-coupon.
D) Junk.
E) Convertible.
Collar
A protective options strategy that involves buying a put option and selling a call option on the same asset to limit the range of possible returns.
Putable Bond
A type of bond that allows the holder to sell the bond back to the issuer at a predetermined price before maturity.
Floating Rate
An interest rate that changes over time as it is tied to an underlying benchmark or index, commonly used in loans and bonds.
- Ascertain the qualities and aims of assorted bond provisions, such as put provisions, call provisions, and protective covenants.
Learning Objectives
- Ascertain the qualities and aims of assorted bond provisions, such as put provisions, call provisions, and protective covenants.