SOFE Exam AFE Topic 2 Question 95 Discussion

Actual exam question for SOFE's AFE exam

Question #: 95
Topic #: 2

[All AFE Questions]

What give the issuer the right to retire the bond at certain times, typically if prevailing market interest rates fall below the rate on the bond?

ACall options

BPrepayment provisions

CVariable income statements

DInvestments modules

Show Suggested Answer

Suggested Answer: D

by Aimee at Feb 06, 2025, 02:25 AM

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Lauran

1 months ago

Prepayment provisions? Sounds like the bond is having a midlife crisis and wants to cash out early. What a rebel!

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Latrice

1 months ago

Call options? More like 'call the issuer and beg them not to retire the bond!' Am I right, folks?

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Valentine

3 days ago

D) Investments modules

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Floyd

4 days ago

C) Variable income statements

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Ivan

14 days ago

B) Prepayment provisions

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Kasandra

17 days ago

A) Call options

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Glenn

1 months ago

Investments modules? Is this a finance exam or a video game? Clearly, the answer is call options.

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Tracey

1 months ago

Variable income statements? Really? That's about as relevant as a chocolate teapot in this context.

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Mila

13 days ago

C) Variable income statements are not relevant in this context.

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Allene

17 days ago

B) Prepayment provisions are also a factor in retiring bonds.

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Candra

18 days ago

A) Call options give the issuer the right to retire the bond at certain times.

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Alpha

2 months ago

Prepayment provisions, no doubt. It's like getting an early birthday present, but for bonds.

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Elli

3 days ago

C) Variable income statements

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Luis

4 days ago

B) Prepayment provisions

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Fidelia

5 days ago

A) Call options

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Justine

2 months ago

I'm not sure, but I think it might be B) Prepayment provisions because it allows the issuer to retire the bond early.

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Kallie

2 months ago

Call options, of course! Gives the issuer the power to retire the bond if market rates fall. Totally makes sense.

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Marci

1 months ago

That's correct, prepayment provisions allow the issuer to retire the bond early.

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Terrilyn

2 months ago

B) Prepayment provisions

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Keneth

2 months ago

Yes, call options give the issuer the right to retire the bond if market rates fall.

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Augustine

2 months ago

A) Call options

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Alfreda

2 months ago

I agree with Hubert, call options give the issuer the right to retire the bond.

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Hubert

3 months ago

I think the answer is A) Call options.

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