Call provisions on corporate bonds are generally included to protect the issuer against large increases in interest rates. They affect the actual maturity of the bond but not its price.

Question

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Call provisions allow the issuer to repurchase bonds before their maturity date, primarily to refinance the debt at lower interest rates, not to protect against increases in rates. They can also affect the bond's price, as bonds callable at the issuer's discretion are generally less valuable to investors than non-callable bonds.

Call Provisions on Corporate Bonds Are Generally Included to Protect