Question: 1. (10 points) A decrease in interest rate volatility:A. Decreases the value of bonds with embedded call options. B. Decreasesthevalueofbondswithembeddedputoptions. C. Decreasesthevalueofbondswithembeddedoptions.D. Increases the value

1. (10 points) A decrease in interest rate volatility:A. Decreases the value of bonds with embedded call options. B. Decreasesthevalueofbondswithembeddedputoptions. C. Decreasesthevalueofbondswithembeddedoptions.D. Increases the value of bonds with embedded options.Please circle the right answer and explain why the answer is correct.

Please read questions carefully, show your work, and indicate your final answers. 1. (10 points) A decrease in interest rate volatility: A. Decreases the value of bonds with embedded call options. B. Decreases the value of bonds with embedded put options. C. Decreases the value of bonds with embedded options. D. Increases the value of bonds with embedded options. Please circle the right answer and explain why the answer is correct

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