Question

Plain vanilla bonds are exotic bonds with unique features.

a) True
b) False

Answer 1

Plain vanilla bonds are not exotic; they are the most basic type of bonds without unique features, contrary to exotic bonds which do have special characteristics.

Step-by-step explanation:

The statement 'Plain vanilla bonds are exotic bonds with unique features' is false. Plain vanilla bonds are the most basic and common type of bonds. They do not have any special or unique features, contrary to exotic bonds which have unique structures or features that differentiate them from standard bond offerings. Plain vanilla bonds are characterized by a straightforward and simple structure, typically featuring a fixed interest rate and a maturity date without additional options or embedded features.