Investors in bonds might exercise a _____ option if interest rates increase, and investors can reinvest the cash proceeds in debt securities with a higher yield.
A)convertible
B)call
C)put
D)serial
E)short-term

Question

Quizplus · Accepted Answer

A put option allows bondholders to sell the bond back to the issuer before maturity, which they might do if interest rates rise, enabling them to reinvest at higher yields.

Investors in Bonds Might Exercise a _____ Option If Interest