单选题 Deep discount bonds have: A. less call protection than bonds selling at par. B. greater reinvestment risk than bonds selling at par. C. greater price volatility than bonds selling at par.

【正确答案】 C

【答案解析】A deep discount bond is a bond selling at a discount of at least 20%. This means that a $1000 face value bond will be selling at $ 800. Using the duration method to show risk, a deep discount bond will have a significantly greater duration than the bond selling at par. Thus having a duration higher than the face value duration means there is more price volatility for the deep discount bond.