Asked by Muhammad Ahmed on Jul 18, 2024
Verified
Call provisions are included in the bond indenture.
Call Provisions
Terms in a bond contract that allow the issuer to repurchase and retire the bond at a specified price before maturity, protecting against interest rate risk.
Bond Indenture
A legal contract between a bond issuer and a bondholder, detailing the terms of the bond such as the coupon rate, maturity date, and obligations of the issuer.
- Fathom the parts and goals of bond indentures, with a focus on sinking funds and call provisions.
Verified Answer
KC
Kaykay Crockett CrockettJul 23, 2024
Final Answer :
True
Explanation :
Call provisions are terms included in the bond indenture that allow the issuer to repurchase or "call" the bond before its maturity date, typically at a premium over the face value.
Learning Objectives
- Fathom the parts and goals of bond indentures, with a focus on sinking funds and call provisions.
Related questions
Sinking Fund Provisions Are Included in the Bond Indenture
The Call Premium Increases as the Time to Maturity Decreases
Sinking Funds Are Devices Used to Force Companies to Retire ...
__________ Included in the Bond Indenture to Protect Bondholders from ...
The Legal Document That Includes the Basic Terms and Details ...