A call feature will have no impact on the value of a bond if interest rates rise.

Name: A call feature will have no impact on the value of a bond if interest rates rise.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A call feature gives the issuer the option to redeem the bond before maturity. If interest rates rise, the issuer is more likely to call the bond because they can issue new bonds at a lower interest rate. This reduces the value of the bond for investors.

A Call Feature Will Have No Impact on the Value