问题如下：
Steele Ferguson, a senior analyst at Samuel, is reviewing threefixed-rate bonds issued by a local firm, Pro Star, Inc.
A fall in interest rates would most likely result in:
选项：
A. a decrease in the effective duration of Bond #3.
B. Bond #3 having more upside potential than Bond #2.
C. a change in the effective convexity of Bond #3 frompositive to negative.
解释：
A fall in interestrates results in a rise in bond values. For a callable bond such as Bond #2,the upside potential is capped because the issuer is more likely to call thebond. In contrast, the upside potential for a putable bond such as Bond #3 isuncapped. Thus, a fall in interest rates would result in a putable bond havingmore upside potential than an otherwise identical callable bond. Note that A isincorrect because the effective duration of a putable bond increases, notdecreases, with a fall in interest rates—the bond is less likely to be put andthus behaves more like an option-free bond. C is also incorrect because theeffective convexity of a putable bond is always positive. It is the effectiveconvexity of a callable bond that will change from positive to negative ifinterest rates fall and the call option is near the money.
麻烦解释一下选项B，谢谢
