An investor is more likely to exercise a put option on a bond when:
A)interest rates are expected to increase.
B)interest rates are expected to decrease.
C)the security's price is expected to increase.
D)the security's rating is upgraded by Moody's.

Question

Quizplus · Accepted Answer

An investor is more likely to exercise a put option on a bond when interest rates are expected to increase, as this would typically lead to a decrease in bond prices, making the put option more valuable.

An Investor Is More Likely to Exercise a Put Option