The Call Feature Is an Advantage to the Issuing Firm

question 130

Multiple Choice

The call feature is an advantage to the issuing firm

• A)if the bond has a floating rate
• B)if interest rates decline
• C)if the bond has a low par value
• D)if interest rates increase

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Opportunity Cost

The benefit that is missed or foregone when choosing one alternative over another.

Excess Capacity

A situation where a company's production facilities are capable of producing more than the demand for its products or services.

Direct Expenses

Costs that can be directly attributed to the production of specific goods or services, such as raw materials and direct labor.