When a Corporation Has a Right to Redeem Bonds in Advance

question 171

Multiple Choice

When a corporation has a right to redeem bonds in advance of the maturity date,the bond is considered a:

• A)Convertible bond.
• B)Callable bond.
• C)Junk bond.
• D)Debenture bond.

---

Definitions:

Negative Externality

An economic situation where a third party is negatively affected by the actions of others, typically not reflected in the cost of those actions, such as pollution.

Common-Resource Problem

A dilemma in the management of resources that are available to all but are susceptible to overuse and depletion because they are not excludable.

Nontoll Roads

Public roads that can be used without paying a fee, financed by taxes rather than direct user charges.

Public Goods

Products or services that are non-excludable and non-rivalrous, meaning they can be consumed by one person without preventing simultaneous consumption by others.