What is most likely to cause a situation where a callable bond will be called by the issuer?

Question

Quizplus · Accepted Answer

When the yield on a callable bond decreases, the issuer may choose to call the bond because they can issue new bonds with a lower interest rate, resulting in savings for the issuer. A decrease in yield corresponds to an increase in the price of the bond, so it wouldn't make sense for the issuer to call the bond if its value had dropped significantly. On the other hand, if the yield on the bond increases significantly, the issuer may choose not to call the bond because it would be more expensive for them to issue new bonds.

What Is Most Likely to Cause a Situation Where a Callable