SIE (Securities Industry Essentials) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the SIE Exam with flashcards and multiple choice questions, each question offers hints and thorough explanations. Gear up for your exam now!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Call protection is most valuable to a bond owner when bond prices are:

Falling
Remaining stable
Volatile
Rising

The correct answer is: Rising

Call protection is most valuable to a bond owner when bond prices are rising. This means that the bond's interest rate is lower than the current market rate, and therefore the bond owner does not have to worry about the issuer calling back the bond and reissuing it at a lower interest rate. If bond prices are falling, remaining stable, or volatile, the issuer may exercise the call provision and call back the bond, leaving the bond owner with a lower return on their investment. Therefore, option D is the correct answer.