Which of the Following Statements Is False Regarding a Call

question 47

Multiple Choice

Which of the following statements is false regarding a call provision?

• A) The issuer can repurchase a fraction of the outstanding bonds in the market or it can make a tender offer for the entire issue.
• B) A call provision allows the issuer to repurchase the bonds at a predetermined price.
• C) The call price is generally set at or below, and is expressed as a percentage of, the bond's face value.
• D) A call feature allows the issuer of the bonds the right (but not the obligation) to retire all outstanding bonds on (or after) a specific date (the call date), for the call price.

---

Definitions:

Rational

The quality of being based on or in accordance with reason or logic, often related to the ability to think, understand, and form judgments by a process of logic.

Fully Rational Being

An entity capable of comprehensive reasoning, capable of making logically consistent decisions based on full information.

Morality

A system of values and principles that determine appropriate behavior, guiding individuals in distinguishing right from wrong based on societal, religious, or personal standards.

Hypothetical Imperative

A command of reason that applies only conditionally, suggesting an action to achieve a specific result, as posited by philosopher Immanuel Kant.