The Call Provision Found on Most Publicly Issued Bonds Are

question 154

Multiple Choice

The call provision found on most publicly issued bonds are advantageous to the ______ because _____________________.

• A) Issuer; it allows issuing firms to purchase back the bonds if interest rates move favourably
• B) Buyer; it allows buyers to sell back their bonds to the issuer if interest rates move up
• C) Government; issuing companies and buyers have to pay higher taxes on these bonds
• D) Buyer; these bonds typically have lower coupon rates
• E) Issuer; they can issue these bonds with relatively lower coupon rates than bonds without a call provision

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Definitions:

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Emergent Norm Theory

A sociological theory proposing that in situations of uncertainty or without clear societal norms, new norms emerge collectively as individuals respond to the situation.

Symbolic Interactionist

A perspective in sociology that focuses on the meanings individuals assign to objects, events, and behaviors, and how these meanings shape social interactions and identities.