Which of the Following Statements Regarding Bond Call Provisions Is

question 22

Multiple Choice

Which of the following statements regarding bond call provisions is FALSE?

• A)When bond yields have increased,by exercising the call on the callable bond and then immediately refinancing,the issuer can lower its borrowing costs.
• B)To understand how call provisions affect the price of a bond,we first need to consider when an issuer will exercise its right to call the bond.
• C)If the call provision offers a cheaper way to retire the bonds,the issuer will forgo the option of purchasing the bonds in the open market and call the bonds instead.
• D)An issuer can always retire one of its bonds early by repurchasing the bond in the open market.

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Definitions:

Planned Change Effort

Involves deliberate attempts to improve organizational effectiveness or adapt to external changes through systematic steps and strategies.

Participation

involves the act of taking part in an activity or contributing to a group effort in a collaborative or decision-making process.

Employee Resistance

Opposition or pushback by workers against changes or policies introduced by management.

Socialization

The process by which individuals learn and adopt the norms, values, and behaviors appropriate to their society or organizational culture.