Whis of the following is true about callable bonds? I. If called, must always be at...
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Whis of the following is true about callable bonds?
I. If called, must always be at par value
II. Will normally be called after interest rates have dropped
III. Can be called by either the bond holder of the bond issuer
IV. Carry higher interest rates when issued due to the callable feature
A. II and Iv, only
B. All four are true
C. I and II, only
D. II and III, only
Homework Answers
A.
II and IV, only
I is incorrect because call premium will be there
III is incorrect because it can be called only by the bond
issuer
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Seven years ago the Templeton Company issued 18-year bonds with an 11% annual coupon rate at their $1,000...
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