Callable Bonds May Not Be Called Immediately After a Rate

question 94

Multiple Choice

Callable bonds may not be called immediately after a rate decrease because

• A) the call price if often at a premium above par value.
• B) the call provision is often deferred for several years after the bond's issue.
• C) recalling the old bonds and issuing new ones involves non-trivial flotation costs.
• D) all of the above.

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Definitions:

Before World War II

This refers to the historical period and events that occurred before the start of the Second World War in 1939.

Psychoanalysis

A therapeutic approach founded by Sigmund Freud which explores unconscious motivations and conflicts driving human behavior.

Unconscious

pertains to processes and thoughts not immediately accessible or recognizable by the conscious mind.

Therapy

Therapy is a broad term for treating mental health problems by talking with a psychiatrist, psychologist, or other mental health provider.