All of the following statements regarding a 6% municipal bond that is puttable at par are true EXCEPT the:
A) bond is likely to trade at a discount in the secondary market when it is puttable.
B) owner would likely put the bond to the issuer when interest rates are rising.
C) bond may be put to the issuer at the owner's discretion.
D) owner will receive $1,000 from the issuer when the put option is exercised.
Answer: A) bond is likely to trade at a discount in the secondary market when it is puttable.