Asked by Kendra Grady on May 16, 2024
Verified
Issuers tend to call bonds when market interest rates are declining.
Call Bonds
Bonds that can be redeemed by the issuer before their maturity date, typically at a premium, giving issuers flexibility in refinancing opportunities.
Market Interest Rates
The prevailing rate of interest available in the marketplace on loans and deposits, influenced by factors such as supply and demand, government policy, and economic conditions.
- Apprehend the classifying system and risk gradations of diverse bonds and securities.
Verified Answer
LM
Lucia MartinMay 22, 2024
Final Answer :
True
Explanation :
Issuers often call bonds when market interest rates are declining because they can refinance their debt at a lower cost, similar to how a homeowner might refinance a mortgage to take advantage of lower interest rates.
Learning Objectives
- Apprehend the classifying system and risk gradations of diverse bonds and securities.