If a Bond Has a Call Feature, It Often Has

question 31

True/False

If a bond has a call feature, it often has a call penalty, which must be paid to the bondholder in partial compensation for the early retirement of the bond.

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Definitions:

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Risk of Loss

Risk of loss refers to the legal and financial responsibility for the damage, destruction, or loss of property, often determined by the terms of a contract.

Merchant

An individual or company engaged in the wholesale or retail sale of goods, services, or commodities for profit.

Carrier

In telecommunications, an entity that provides services for transmitting data and communications; in transportation, a company responsible for transporting goods or passengers.