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C. performance routing
D. policy based routing
Answer: C
NEW QUESTION: 2
The required return of an option-free, 10% coupon, semi-annual pay bond with 12 years to maturity is
10.37%. A 10% coupon, semi-annual pay bond with 12 years to maturity is callable after the fifth year.
Assuming credit quality and other relevant factors are equivalent:
A. the required return of the callable bond is equal to 10.37%
B. the required return of the callable bond is less than 10.37%
C. the required return of the callable bond is greater than 10.37%
Answer: C
Explanation:
Holding the promised cash flows constant, a bond's price and required return are inversely related. The call option reduces the value of the callable bond relative to the value of an option-free bond.
NEW QUESTION: 3
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