If a bond has a call feature,it usually also has a call penalty,which must be paid to the bondholder in partial compensation for the early retirement of the bond.

Question

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This is because the call feature allows the issuer to retire the bond before its maturity date, and the call penalty compensates the bondholder for the loss of future interest payments that they would have received if the bond had remained outstanding until its maturity.

If a Bond Has a Call Feature,it Usually Also Has