Which One of the Following Statements Is Correct Concerning a Callable

question 80

Multiple Choice

Which one of the following statements is correct concerning a callable bond that is currently selling below face value? Assume there is no risk of default. Also assume the issuer only calls bonds when they can be refinanced at a lower rate of interest.

• A)The bond will most likely be called while the bonds are selling at a discount.
• B)The yield to maturity is presently more relevant to an investor than the yield to call.
• C)The bond is likely going to be called due to the low current interest rates.
• D)The bond is currently paying a premium.
• E)The bond issue will most likely be replaced with a new bond issue.

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Definitions:

Type A

A personality type characterized by high ambition, aggression, competitiveness, and a sense of urgency, often linked to stress and heart disease.

Temper

An individual's characteristic mood or emotional state, which can influence their behavior and reactions.

Executive

Pertains to the branch of a government or organization responsible for putting decisions or policies into effect, or referring to the higher-level administrative or managerial functions in a business.

Type B

Personality type characterized by a more relaxed, non-urgent approach to life, and less prone to stress compared to Type A personalities.