Which of the following is an important advantage to the issuer of a bond with a call provision?
A) They are able to avoid interest rate risk.
B) They are able to avoid reinvestment rate risk.
C) They are able to reduce their credit risk.
D) They allow for refinancing opportunities.

Question

Quizplus · Accepted Answer

A call provision allows the issuer to repurchase the bond before its maturity date, typically to refinance the debt at a lower interest rate, thus providing refinancing opportunities.

Which of the Following Is an Important Advantage to the Issuer