Which of the Following Is Not True Regarding the Call

question 44

Multiple Choice

Which of the following is not true regarding the call provision?

• A) It typically requires a firm to pay a price above par value when it calls its bonds.
• B) The difference between the market value of the bond and the par value is called the call premium.
• C) A principal use of the call provision is to lower future interest payments.
• D) A principal use of the call provision is to retire bonds as required by a sinking-fund provision.
• E) A call provision is normally viewed as a disadvantage to bondholders.

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Definitions:

Reflex Arc

The connection of the afferent neurons to the interneurons to the efferent neurons, resulting in a reflex action.

Somatic Nervous System

A part of the peripheral nervous system responsible for carrying motor and sensory information both to and from the central nervous system.

Peripheral Nervous System

A portion of the nervous system that consists of the nerves outside the brain and spinal cord, connecting the central nervous system to limbs and organs.

Autonomic Nervous System

The part of the nervous system responsible for control of bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.