A Call Provision Gives Bondholders the Right to Demand,or "Call

question 55

True/False

A call provision gives bondholders the right to demand,or "call for," repayment of a bond.Typically,companies call bonds if interest rates rise and do not call them if interest rates decline.

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Definitions:

Accumulated Other Comprehensive Income

A component of shareholders' equity on the balance sheet, representing gains and losses not reflected in net income, such as foreign currency items, unrealized gains/losses on certain investments, and pension plan adjustments.

Retractable Preferred Shares

Preferred shares that give the holder the right to require the issuer to repurchase the shares at predetermined conditions.

Future Trading

The buying and selling of financial instruments or commodities for future delivery on a futures exchange.

Expected Dividend Rate

A projection of the amount (often as a percentage) a company is expected to pay out to shareholders in dividends for each share of stock.