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:

Survival Hike

An outdoor adventure aimed at testing or improving the skills necessary to survive in wilderness conditions.

Personal Injury

Physical or psychological harm to a person resulting from the negligence, recklessness, or intentional misconduct of another party.

Express Warranty

A clearly stated guarantee by a seller about the condition, quality, or performance of a product or service.

Basis of the Bargain

Refers to the fundamental expectations or promises that constitute the foundation for the agreement between contracting parties.