When a bond is called, the investor faces the prospect of reinvesting the funds at a lower rate.

Name: When a bond is called, the investor faces the prospect of reinvesting the funds at a lower rate.
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When a bond is called, it is typically because interest rates have fallen, and the issuer can refinance at a lower rate. This leaves the investor with the challenge of reinvesting the returned principal at the now lower prevailing interest rates.

When a Bond Is Called, the Investor Faces the Prospect