If a bond has a make-whole call provision,the:
A)call premium can be either positive or negative.
B)bond's market price will always equal its face value.
C)bondholder will receive the face value amount plus interest if the bond is called.
D)bondholder will receive the face value amount minus any interest paid to date if the bond is called.
E)call price will increase as interest rates decrease.

Question

Quizplus · Accepted Answer

A make-whole call provision ensures that the bondholder receives a price that reflects the present value of future coupon payments, which means the call price increases as interest rates decrease.

If a Bond Has a Make-Whole Call Provision,the