Callable bonds
A. are called when interest rates decline appreciably.
B. have a call price that declines as time passes.
C. are called when interest rates increase appreciably.
D. are more likely to be called when interest rates decline and have a call price that declines as time passes.
E. have a call price that declines as time passes and are called when interest rates increase appreciably.
D. are more likely to be called when interest rates decline and have a call price that declines as time passes.
Callable bonds often are refunded (called) when interest rates decline appreciably. The call price of the bond (approximately par and one year's coupon payment) declines to par as time passes and maturity is reached.
You might also like to view...
Describe the difference between proactive and reactive change. Contrast how managers act in each type. Which type of change is better?
What will be an ideal response?
A bond's issuance price will always be the ________ of future cash flows discounted back at the current market rate of interest
a. face value b. future value c. present value d. maturity value
A balloon loan calls for repayment of both interest and principal at regular intervals, with the payment levels set so that the loan expires at a preset date
Indicate whether this statement is true or false.
Amar, a recently retired billionaire investment banker, has established a foundation to help build schools in Southeast Asia. This foundation is engaging in __________.
A. corporate philanthropy B. moral relativism C. socially responsible investing D. legal compliance E. sustainability