An embedded option is one where the security contains features that are option-like.Which of the following is not an example of a security with an embedded option?
A)Callable bond.
B)Convertible bond.
C)Mortgages in the US.
D)Preferred stock.

Question

Quizplus · Accepted Answer

Preferred stock does not inherently contain an embedded option like callable bonds, convertible bonds, or US mortgages, which often include features allowing for early repayment or conversion into other securities.

An Embedded Option Is One Where the Security Contains Features