SIE Exam Practice Question 640
Question: 640
All but which of the following are correct regarding a bond's call provision?
Correct Answer: B
Explanation:
A bond's call provision may be included in a bond agreement, and it allows the debtor to pay off the debt after a specific period of time at a predetermined price. It protects the issuer from declines in interest rates. If a bond is callable it will cause an investor's required rate of return to be higher.
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