Which of the following bond types provides the most benefit to a bondholder when bond prices are declining?
A) Callable
B) Plain vanilla
C) Multiple put

Question

Quizplus · Accepted Answer

Multiple put bonds allow the bondholder to sell the bonds back to the issuer at set dates before maturity, providing some protection against declining bond prices. Callable bonds give the issuer the ability to redeem the bond early, which is not beneficial to the bondholder when prices are declining. Plain vanilla bonds do not have any special features that would provide additional benefit to the bondholder in a declining market.

Which of the Following Bond Types Provides the Most Benefit