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Nazim wants to include bonds in his investment portfolio, but he wants the option to sell the bond to the issuer at a specified price on a certain date before the maturity of the bond. Which of the following
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Nazim wants to include bonds in his investment portfolio, but he wants the option to sell the bond to the issuer at a specified price on a certain date before the maturity of the bond. Which of the following bond redemption features should he pick?

O Putable bond
O Convertible bond

User Laye
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1 Answer

6 votes

Answer:

Putable Bond

Step-by-step explanation:

This is an embedded put option that enables the bondholder to demand for the payment of the principal sum from the issuer. It is effectively an option given to bond holders to put the bond back to the issuer once during the lifetime of the bond or on multiple dates.

User Jismon Thomas
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