A call feature on a bond:
A)prevents the interest rate on the bond from fluctuating.
B)determines the earliest date that the bonds may be retired.
C)allows the company to buy back the bonds at a predetermined price.
D)gives the issuer the right to call the investment banker at any time during the bond's life.

Question

Quizplus · Accepted Answer

A call feature on a bond allows the issuer to buy back the bonds at a predetermined price, usually at a premium, before the maturity date. This gives the issuer flexibility in managing their debt and taking advantage of changes in the interest rate environment.

A Call Feature on a Bond