Which of the following statements about callable bonds is NOT correct?
A)Callable bonds have higher yields than comparable non-callable bonds.
B)The call price is usually at par or slightly above the bond's par value.
C)The shorter is the term to maturity,the greater is the call interest premium.
D)Investors are notified when bonds are called.

Question

Quizplus · Accepted Answer

Callable bonds typically have a higher call interest premium when the term to maturity is longer, not shorter, because the issuer has more time to benefit from calling the bond if interest rates decline.

Which of the Following Statements About Callable Bonds Is NOT