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Author Question: Which statement regarding callable bonds is true? (Read 16 times)

Dannyrod2

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on: Aug 7, 2023
Which statement regarding callable bonds is true?

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Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be smaller if the current market interest rate is below the coupon rate than if it is above the coupon rate.


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Corporate treasurers like issuing callable bonds because the company could sell a new issue of high-yielding securities if and when interest rates increase.


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Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be smaller if the current market interest rate is above the coupon rate than if it is below the coupon rate.


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The actual life of a callable bond will always be equal to or less than the actual life of a noncallable bond with the same maturity. Therefore, if the yield curve is upward sloping, the required rate of return will be lower on the callable bond.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by Dannyrod2 on Aug 7, 2023

zubair1583

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Dannyrod2

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

milbourne11

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Reply 3 on: Yesterday
Excellent

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