The Call Feature Makes a Bond Riskier Because

question 112

Multiple Choice

The call feature makes a bond riskier because

• A) the issuer may not have sufficient cash to redeem the bonds at the call date.
• B) investors who ignore the call will not be paid the bond's principal.
• C) after the bond is called, the investor will need to find a new place to invest, probably at a lower rate.
• D) the issuer may decided not to call the bond and it will have to be held to maturity or sold in the secondary market.

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Definitions:

Employer's Liability

The legal responsibility of employers to compensate employees for injuries or damages incurred in the course of employment.

Respondeat Superior

A legal principle that assigns legal liability to an employer or principal for the misconduct of an employee or agent when those actions are carried out in the course of their employment or representation.

Vicarious Liability

Legal responsibility assigned to an individual or entity for the actions of another, based on a particular relationship, such as employer-employee.

Ratification Manifest

The overt expression or demonstration of approval or confirmation of an act or agreement, often legally required for ratification.