Which one of the following statements related to callable bonds is correct?

Question

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Callable bonds are more likely to be called if market interest rates decline because the issuer can then issue new bonds at a lower interest rate, reducing their interest expense. Option A is incorrect as callable bonds can be issued at a premium or discount, not necessarily at the call price. Option B is incorrect as callable bonds can only be called according to the terms stated in the bond's indenture. Option C is incorrect as callable bonds are generally called at the call price, not the market price. Option E is also incorrect as callable bonds are generally priced lower than comparable noncallable bonds due to the possibility of the bond being called before maturity.

Which One of the Following Statements Related to Callable Bonds