When a Bond Has a Call Feature, the Investor Should

question 105

Multiple Choice

When a bond has a call feature, the investor should consider the ________ when deciding whether to invest in the bond if it is not selling at par value.

• A) convertibility provision
• B) interest rate
• C) yield to call
• D) yield to maturity

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Definitions:

Customer Margin

The profit derived from serving a particular customer, calculated as sales revenue minus the costs of servicing that customer.

Serving Customers

The process or actions taken to provide goods or services to customers in a way that meets or exceeds their expectations.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific activities and then to products or services based on their consumption of those activities.

Machine-Hours

A measure of the amount of time machines are run in the production process, often used as a basis for allocating manufacturing overhead costs.