SIE Exam Question 787: Answer and Explanation

Question: 787

Which of the following refers to taking a loss on a bond and replacing it with a substantially different bond to avoid triggering the wash sale rule?

• A. Bond conversion
• B. Bond spread
• C. Bond swap
• D. Bond yield

Correct Answer: C

Explanation:

A bond swap refers to taking a loss on a bond and replacing it with a substantially different bond to avoid triggering the wash sale rule.