A bond is most likely to be called

Name: A bond is most likely to be called
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Question

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When market interest rates decrease, issuers of bonds may choose to call the bonds and issue new bonds at a lower interest rate, which reduces their cost of borrowing. This often means that investors who purchased the original bonds at a higher interest rate are forced to reinvest their funds at a lower rate, resulting in a lower yield. This is the most common reason why bonds are called.

A Bond Is Most Likely to Be Called