Which of the Following Is Not True Regarding Callable Bonds

question 117

Multiple Choice

Which of the following is not true regarding callable bonds?

• A)This feature allows the borrower to repay the bonds before their scheduled maturity date.
• B)This feature helps protect the borrower against future decreases in interest rates.
• C)Callable bonds benefit the bond investor.

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Definitions:

Optimal Number

The most favorable quantity that balances costs and benefits in a given situation, often used in inventory management and resource allocation.

Integer-Multiple

A value that is an integral (whole) number times of a particular number, indicating a multiplicative relationship.

Fixed Cost

Expenses that do not change with the level of goods or services produced by the business, such as rent for a building.

Managerial Levers

Tools or methods used by managers to influence the performance and direction of their organization.