SIE practice questioneasyPuttable bonds
A puttable bond allows the investor to:
- ASell the bond back to the issuer at predetermined times✓ Correct answer
- BReceive a higher coupon
- CExchange the bond for equity shares
- DAvoid paying taxes on interest income
Explanation
Why A — Sell the bond back to the issuer at predetermined times
Puttable bonds give investors the right to sell the bond back to the issuer at specified times, typically at par. They do not confer higher coupons, equity conversion, or tax benefits.
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