A call option is a desirable feature of a bond for __________ and the put option is a desirable feature of a bond for ____________.
A)investors; issuers
B)issuers; investors
C)investors; investors
D)issuers; issuers

Question

Quizplus · Accepted Answer

A call option allows issuers to redeem the bond before maturity, which is beneficial for them if interest rates fall. A put option allows investors to sell the bond back to the issuer before maturity, which is beneficial for them if interest rates rise.

A Call Option Is a Desirable Feature of a Bond