Which of the Following Statements Is FALSE

question 87

Multiple Choice

Which of the following statements is FALSE?

• A)If the call provision offers a cheaper way to retire the bonds, the issuer will forgo the option of purchasing the bonds in the open market and call the bonds instead.
• B)To understand how call provisions affect the price of a bond, we first need to consider when an issuer will exercise its right to call the bond.
• C)When bond yields have increased, by exercising the call on the callable bond and then immediately refinancing, the issuer can lower its borrowing costs.
• D)An issuer can always retire one of its bonds early by repurchasing the bond in the open market.

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Definitions:

Code of Ethics

A set of guidelines designed to outline acceptable behaviors and practices for individuals and organizations.

Informal Policies

Unwritten rules or practices that, despite not being officially codified, influence behavior and decision-making within an organization or community.

Social Policy

A branch of public policy dealing with social issues, including health, housing, education, and welfare, aiming to improve human welfare and meet citizens' needs.

Buffer

In communication, a statement or section designed to lessen the impact of the message that follows, often used to introduce negative news gently.