Call interest premium is:
A)the difference in interest rates between callable and comparable non-callable bonds.
B)the difference in interest rates between puttable and comparable non-puttable bonds.
C)the difference in interest rates between puttable and comparable non-callable bonds.
D)the difference in interest rates between callable and comparable non-puttable bonds.

Question

Quizplus · Accepted Answer

The call interest premium is the additional yield that investors demand for holding a callable bond compared to a similar non-callable bond, due to the risk that the issuer may redeem the bond before maturity.

Call Interest Premium Is