A Call Option in a Bond Indenture Gives the Issuing

question 76

True/False

A call option in a bond indenture gives the issuing corporation an option to call the bonds before they mature by paying the par value plus a call premium to the bondholders.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping.

Supply Curve

A graph showing the relationship between the price of a good and the quantity of that good that suppliers are willing to sell at each price level.

Elastic

Describes a situation in which the quantity demanded or supplied of a good or service changes significantly in response to a change in price.

Total Revenues

The total amount of income generated by the sale of goods or services related to a company's primary operations.