A ________ bond gives the issuer an option to retire the bond before maturity at a specific price after a specific date.

Question

Quizplus · Accepted Answer

A callable bond gives the issuer the option to retire the bond before maturity at a specific price after a specific date. The issuer would exercise this option if interest rates have decreased, allowing them to issue new bonds at a lower rate and retire the higher-yielding callable bond.

A ________ Bond Gives the Issuer an Option to Retire