Asked by Jameka Hicks on May 22, 2024
Verified
What provision allows the issuer to redeem the bond before its maturity at a specified price?
A) Bond provision
B) Convertible provision
C) Call provision
D) Redeem provision
Call Provision
A clause in a bond or other fixed-income security agreement that allows the issuer to repurchase and retire the debt before its maturity date, typically at a premium price.
Redeem Provision
A clause in a financial contract allowing the holder to exchange a particular financial instrument under specified conditions, often before maturity.
- Comprehend the fundamental traits and varieties of bonds.
Verified Answer
MK
Michale KissickMay 23, 2024
Final Answer :
C
Explanation :
The call provision allows the issuer to redeem the bond before its maturity at a specified price, giving the issuer flexibility to refinance the debt if interest rates decline.
Learning Objectives
- Comprehend the fundamental traits and varieties of bonds.
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