SIE practice questionmediumCall risk
Which bondholder is most exposed to call risk?
- AA holder of a long-term, non-callable corporate bond
- BA holder of a callable corporate bond✓ Correct answer
- CA holder of a floating-rate bond
- DA holder of Treasury bills
Explanation
Why B — A holder of a callable corporate bond
Callable bonds can be redeemed by issuers before maturity, creating call risk. Non-callable, floating-rate, and Treasury bills lack this feature.
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