A Bond Has a Call Provision

question 2

Multiple Choice

A bond has a call provision. The call provision allows the ________ to _________ the bonds before maturity.

• A) investor; sell back.
• B) trustee; buyback.
• C) issuer; call in.
• D) investor; call in.
• E) trustee; sell back.

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Definitions:

Trading

The action or activity of buying and selling goods and services or financial instruments, often in financial markets.

Lenders

Individuals, institutions, or entities that provide funds to others with the expectation that the funds will be repaid, typically with interest.

Risk-Free Rate

The return on an investment with no risk of financial loss, often represented by the yield on government securities.

Earning Power

The ability of a business to generate net income consistently over time.