The Call Provision Found on Most Publicly Issued Bonds Are

Multiple Choice

The call provision found on most publicly issued bonds are advantageous to the ______ because _____________________.

A) Issuer; it allows issuing firms to purchase back the bonds if interest rates move favourably
B) Buyer; it allows buyers to sell back their bonds to the issuer if interest rates move up
C) Government; issuing companies and buyers have to pay higher taxes on these bonds
D) Buyer; these bonds typically have lower coupon rates
E) Issuer; they can issue these bonds with relatively lower coupon rates than bonds without a call provision