Exercise：
　　An investment in a callable bond can be analytically decomposed into a:
　　A.     Long position in a non-callable bond and a short position in a put option
　　B.     Short position in a non-callable bond and a long position in a call option
　　C.     Long position in a non-callable bond and a long position in a call option
　　D.     Long position in a non-callable bond and a short position in a call option
　　Answer: D
　　A callable bond includes an embedded option for the issuer to call the bond at a stated redemption or call price. If the issuer is long the call option, then the holder of a callable bond is short the call option.
　　相關知識點：Bonds with Embedded Options
　　Callable bond: issuer has the right to buy back the bond in the future at a set price; as yields fall, bond is likely to be called; prices will rise at a decreasing rate-negative convexity.
　　Puttable bond: bondholder has the right to sell bond back to the issuer at a set price.
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