Securities with embedded options:
A)often have higher yields than comparable Treasury securities.
B)generally have no prepayment risk.
C)are always free of default risk.
D)all of the above.
E)a.and b.only

Question

Quizplus · Accepted Answer

Securities with embedded options often have higher yields than comparable Treasury securities due to the additional risks, such as prepayment risk, they carry. They are not free of default risk.

Securities with Embedded Options