A Deferred Call Provision

question 22

Multiple Choice

A deferred call provision:

• A) requires the bond issuer to pay the current market price, minus any accrued interest, should the bond be called.
• B) allows the bond issuer to delay repaying a bond until after the maturity date should the issuer so opt.
• C) prohibits the issuer from ever redeeming bonds prior to maturity.
• D) prohibits the bond issuer from redeeming callable bonds prior to a specified date.
• E) requires the bond issuer pay a call premium that is equal to or greater than one year's coupon should the bond be called.

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