Which of the Following Is/are True About Callable Bonds

question 32

Multiple Choice

Which of the following is/are true about callable bonds?
I. Must always be called at par
II. Will normally be called after interest rates drop
III. Can be called by either the bondholder or the bond issuer
IV. Have higher required returns than non-callable bonds

• A)I and II only
• B)II and IV only
• C)II and III only
• D)I,II,and III only
• E)I,II,III,and IV are true.

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Definitions:

Higher-Order Conditioning

A process in classical conditioning by which a stimulus that was previously neutral becomes conditioned by being paired with another conditioned stimulus.

Extinction

In behavioral psychology, the gradual weakening and eventual disappearance of a conditioned response.

Stimulus Generalization

The psychological phenomenon where a response to a specific stimulus becomes triggered by stimuli that are similar in nature.

Conditioned Response

The learned response to a previously neutral stimulus that has become associated with an unconditioned stimulus through classical conditioning.