Juan Recently Invested in 15-Year Bellandro Bay Brewery Bonds Paying

question 130

Multiple Choice

Juan recently invested in 15-year Bellandro Bay Brewery bonds paying 6% interest annually, with a maturity date of 2030. The bonds are callable in 2025. If interest rates go down to 4.5% in the year 2025, the brewery is likely to:

• A) not exercise the call.
• B) exercise the call.
• C) give bondholders a choice of whether they want to turn the bonds back to the brewery.
• D) decrease the interest rate that they are willing to pay the holder.

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