Which of the Following Statements Is FALSE Regarding a Call

question 37

Multiple Choice

Which of the following statements is FALSE regarding a call provision?

• A)The issuer can repurchase a fraction of the outstanding bonds in the market or it can make a tender offer for the entire issue.
• B)A call provision allows the issuer to repurchase the bonds at a predetermined price.
• C)The call price is generally set at or below,and expressed as a percentage of,the bond's face value.
• D)A call feature allows the issuer of the bond the right (but not the obligation)to retire all outstanding bonds on (or after)a specific date (the call date),for the call price.

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Definitions:

Negligence

A failure to behave with the level of care that a reasonably prudent person would have exercised under the same circumstances, resulting in harm or injury.

Tort Liability

Legal responsibility arising from civil wrongs not arising out of contractual obligations, resulting in harm or injury to another.

Principal

The main party to a transaction, agreement, or contract, often responsible for fulfilling the obligations set within.

Third Persons

Individuals who are not a direct party to a legal agreement or transaction but may be affected by it or have certain rights or obligations related to it.