SIE practice questionmediumCallable/Putable Bonds
A bond is structured so that the investor can force the issuer to redeem early at predetermined dates. This feature is known as:
- ASinking fund
- BCall provision
- CConvertible feature
- DPut provision✓ Correct answer
Explanation
Why D — Put provision
A put provision lets the investor demand early redemption. Call is for issuers, convertibles swap for stock, and a sinking fund is for planned repayment.
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