Which of the Following Statements Is FALSE

question 71

Multiple Choice

Which of the following statements is FALSE?

• A) 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.
• B) 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.
• C) When bond yields have increased, by exercising the call on the callable bond and then immediately refinancing, the issuer can lower its borrowing costs.
• D) An issuer can always retire one of its bonds early by repurchasing the bond in the open market.

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Definitions:

NAICS

The North American Industry Classification System; a standard used by federal statistical agencies for classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. economy.

Industry Definitions

Specific terms and jargon used within a particular sector to describe processes, tools, roles, and standards.

Six-Digit Coding

A reference to standardized codes, such as those in classification systems, that use six digits to categorize detailed information.

Industry Subsector

A specific, defined part of a broader industry, characterized by a unique set of products, services, or manufacturing processes.