The call price of a security generally exceeds the security's par value by an amount equal to ________.
A) one year's stated interest
B) the straight bond value
C) the market value of one share of common stock
D) the market premium

Question

Quizplus · Accepted Answer

The call price of a security typically exceeds its par value by an amount equal to one year's stated interest. This is because the issuer may want to compensate investors for the interest they will lose by calling the bond before its maturity.

The Call Price of a Security Generally Exceeds the Security's