A __________ bond is a bond where the bondholder has the right to cash in the bond before maturity at a specific price after a specific date.

Question

Quizplus · Accepted Answer

A puttable bond is a type of bond where the bondholder has the right to sell the bond back to the issuer before it reaches maturity, usually at a specific price. This provides the bondholder with the option to exit the investment early if interest rates rise or other circumstances change, allowing them to lock in profits or limit losses. Callable bonds, on the other hand, give the issuer the option to redeem or "call" the bond before maturity, typically to take advantage of a decline in interest rates. Coupon bonds are bonds that pay fixed or variable interest payments to the bondholder, while Treasury bonds are government-issued bonds with a fixed interest rate and a fixed maturity date.

A __________ Bond Is a Bond Where the Bondholder Has