Which one of the following increases the probability that a bond will be called?

Question

Quizplus · Accepted Answer

When market interest rates decline, the issuer is more likely to call the bond and refinance the debt at a lower interest rate. A lower market interest rate reduces the issuer's cost of borrowing, making it easier and cheaper to refinance the debt. Therefore, a decrease in market interest rates increases the probability of a bond being called.

Which One of the Following Increases the Probability That a Bond