If a Bond Has a Make-Whole Call Provision,the

question 1

Multiple Choice

If a bond has a make-whole call provision,the:

• A)call premium can be either positive or negative.
• B)bond's market price will always equal its face value.
• C)bondholder will receive the face value amount plus interest if the bond is called.
• D)bondholder will receive the face value amount minus any interest paid to date if the bond is called.
• E)call price will increase as interest rates decrease.

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Definitions:

Order

A request by a customer for a company to provide goods or services at a specified price and time.

Account Balance

The total amount of money in a financial account, calculated by adding all credits and subtracting all debits.

Credits

Accounting entries that increase liabilities or decrease assets, typically reflecting the sources of value in transactions.

Accounts Payable

Liabilities to creditors arising from purchases of goods, services, or loans, representing amounts a company owes and must pay in the near term.