When interest rates fall,investors have more incentive to sell their retractable bonds back to the issuer.

Question

Quizplus · Accepted Answer

When interest rates fall, the value of retractable bonds generally increases, so investors have less incentive to sell them back to the issuer. This is because they can continue to earn the higher interest rate until the retractable feature is triggered, allowing them to redeem their bonds for the higher value.

When Interest Rates Fall,investors Have More Incentive to Sell Their