Which of the Following Statements Is False

question 37

Multiple Choice

Which of the following statements is false?

• A) When bond yields have increased, by exercising the call on the callable bond and then immediately refinancing, the issuer can lower its borrowing costs.
• B) To understand how call provisions affect the price of a bond, we first need to consider when an issuer will exercise its right to call the bond.
• C) If the call provision offers a cheaper way to retire the bonds the issuer will forgo the option of purchasing the bonds in the open market and call the bonds instead.
• D) An issuer can always retire one of its bonds early by repurchasing the bond in the open market.

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Definitions:

Pancreatitis

Inflammation of the pancreas.

Inflammation

The body's response to injury or infection, characterized by redness, heat, swelling, and often pain in the affected area.

Pancreas

An organ in the abdominal cavity involved in blood sugar regulation and digestion through the secretion of insulin and digestive enzymes.

Circulatory

Relating to the circulation of blood through the heart and blood vessels, delivering oxygen and nutrients to the body and removing waste products.