Call risk refers to the right of debt collectors to call in the loans in advance of maturity and get an early repayment.

Question

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Call risk actually refers to the possibility that a bond issuer might redeem a bond before its maturity date, typically when interest rates decline, affecting investors who expected longer-term interest income. Debt collectors do not have this right; it is specific to the issuers of callable bonds.

Call Risk Refers to the Right of Debt Collectors to Call