If a Bond Has a Call Feature, It Often Has

question 31

True/False

If a bond has a call feature, it often has a call penalty, which must be paid to the bondholder in partial compensation for the early retirement of the bond.

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Definitions:

Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services over time.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising annually.

CPI

Tracking the average evolution in pricing for a collection of goods and services purchased by people in urban areas, the Consumer Price Index serves as an indicator of these changes over time.

Consumer Price Index

The Consumer Price Index measures the average change over time in the prices paid by consumers for a basket of goods and services.