What Is a Call Provision

question 32

Multiple Choice

What is a call provision?

• A)the periodic repurchasing of issued bonds through a sinking fund by the issuer
• B)an option to the issuer to repurchase the bonds at a predetermined price
• C)the option for the bondholder to convert each bond owned into a fixed number of shares of common stock
• D)a clause in a bond contract that restricts the actions of the issuer that might harm the interests of the bondholders
• E)a formal contract that specifies the firm's obligations to the bondholder

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Definitions:

Imperfect Information

A situation in which parties in a transaction have unequal or inadequate information, leading to market inefficiencies.

Total Employment

The total number of people employed in an economy at a given time, including both full-time and part-time workers.

Unemployed People

Individuals who are capable of working and actively seeking employment but are unable to find a job.

Unemployment Insurance

A government program that provides financial assistance to individuals who are unemployed through no fault of their own, offering temporary financial support while they look for new employment.