Which of the choices below is FALSE?

Question

Quizplus · Accepted Answer

When a firm issues a callable bond, they anticipate that interest rates will fall over the life of the bond, allowing them to potentially redeem the bond early and issue a new bond at a lower interest rate. Option A is true, as the firm issuing a putable bond is providing the bondholder with the option to sell the bond back to the issuer if interest rates rise. Option B is also true, as falling interest rates would make it less likely that the bond will be called by the issuer. Option D is also true, as a putable bond gives the bondholder the option to sell the bond back to the issuer, while a callable bond gives the issuer the option to redeem the bond early.

Which of the Choices Below Is FALSE