Investors in bonds sometimes hold a _____ option, meaning they can force the issuing company to repay the bonds prior to maturity under specified contractual conditions.

Question

Quizplus · Accepted Answer

Investors holding a put option in bonds have the right to force the issuer to buy back the bonds before maturity at a predetermined price, providing investors with a level of protection against adverse movements in interest rates or the issuer's creditworthiness.

Investors in Bonds Sometimes Hold a _____ Option, Meaning They