A ________ provision permits the issuer to retire outstanding bonds before they mature. Such a provision must specify the date bonds can be repaid early and at what price.

Question

Quizplus · Accepted Answer

The provision described in the question is a call provision, which allows the issuer of the bond to retire the bond before its maturity. A put provision allows the holder of the bond to sell the bond back to the issuer before its maturity, while a term provision specifies the length of time until the bond matures. Serial and maturity provisions are not relevant to this question.

A ________ Provision Permits the Issuer to Retire Outstanding Bonds