A Call Feature in a Bond Allows the Issuer the Opportunity

question 47

True/False

A call feature in a bond allows the issuer the opportunity to repurchase bonds at a stated price prior to maturity. This option has a greater chance of being exercised (to the benefit of the bondholder) if market interest rates have fallen since the bond was issued.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government.