If a Company's Bonds Are Callable

question 139

Multiple Choice

If a company's bonds are callable,

• A)the bondholder has the right to sell an option on the bond.
• B)the issuing company is likely to retire the bonds before maturity if the bonds are paying 8% interest while the market rate of interest is 4%.
• C)the bonds are never allowed to remain outstanding until the maturity date.
• D)the investor never knows what the redemption price will be until the bonds are actually called.

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Definitions:

Passive Transport

The movement of substances across cell membranes without the need for energy, utilizing gradients of concentration, pressure, or electrical charge.

Capillaries

Tiny blood vessels that connect arteries and veins, facilitating the exchange of oxygen, nutrients, and waste between blood and tissues.

Filtration

A physical or mechanical process used to separate solid particles from fluids or gases by passing them through a filter medium.

ATP

Adenosine triphosphate, an energy-carrying molecule found in the cells of all living things, which captures chemical energy obtained from the breakdown of food molecules.