relative to an otherwise similar option-free bond, a:
A) putable bond will trade at a higher price.
B) callable bond will trade at a higher price.
C) convertible bond will trade at a lower price.

Question

Quizplus · Accepted Answer

A putable bond provides the bondholder with the right to sell the bond back to the issuer at a predetermined price before maturity, offering additional protection against interest rate increases or issuer default. This feature makes the bond more valuable to investors, leading it to trade at a higher price compared to a similar bond without this option.

Relative to an Otherwise Similar Option-Free Bond, A