A corporate bond will most likely be called if it was issued when interest rates were _____________ and interest rates have since _____________.
A) high; fallen
B) high; risen
C) low; risen
D) low; fallen

Question

Quizplus · Accepted Answer

A corporate bond is more likely to be called (or redeemed before its maturity date) by the issuing entity if it was issued when interest rates were high and interest rates have since fallen. This allows the issuer to refinance the debt at a lower interest rate, reducing their interest expenses.

A Corporate Bond Will Most Likely Be Called If It