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SOFE Exam AFE Topic 2 Question 95 Discussion

Actual exam question for SOFE's AFE exam
Question #: 95
Topic #: 2
[All AFE Questions]

What give the issuer the right to retire the bond at certain times, typically if prevailing market interest rates fall below the rate on the bond?

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Suggested Answer: D

Contribute your Thoughts:

Justine
3 days ago
I'm not sure, but I think it might be B) Prepayment provisions because it allows the issuer to retire the bond early.
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Kallie
4 days ago
Call options, of course! Gives the issuer the power to retire the bond if market rates fall. Totally makes sense.
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Alfreda
9 days ago
I agree with Hubert, call options give the issuer the right to retire the bond.
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Hubert
10 days ago
I think the answer is A) Call options.
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