Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Callable bonds are "called" at the option of the:
a.issuer
b.investor
c.either the investor or the issuer
d.None of the above
Expert Solution
Step 1
Introduction:
A redeemable or redeemable bond is a bond that is redeemable or redeemable by the issuer prior to the bond's maturity date. When an issuer calls a bond, it pays the investor the call price (usually the face value of the bond) along with interest to date, and no interest is paid at that point. Sometimes a call premium is also paid. Demand reserves are often a feature of corporate and municipal bonds.
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