A call provision allows the issuing firm the opportunity to avoid rising interest rates by calling investors and asking for more cash.

Name: A call provision allows the issuing firm the opportunity to avoid rising interest rates by calling investors and asking for more cash.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A call provision allows the issuing firm to repurchase or redeem the bond before its maturity date, typically to refinance the debt at a lower interest rate, not to ask for more cash from investors.

A Call Provision Allows the Issuing Firm the Opportunity to Avoid