Match these terms with their definitions.
-Give the borrower the option to pay off the debt prior to maturity.
A)Callable bonds
B)Long-term lease
C)Convertible bonds
D)Debenture bonds
E)Junk bonds
F)Mortgage bonds
G)Notes payable
H)Short-term lease
I)Secured bonds

Question

Quizplus · Accepted Answer

Callable bonds are a type of bond that allows the issuer to repay the bond before its scheduled maturity date. This feature is beneficial to the issuer, especially when interest rates have fallen since the bond was issued, as it allows the issuer to replace high-interest debt with new bonds at a lower interest rate. For investors, callable bonds typically offer a higher yield to compensate for the risk that the bonds might be called away before maturity.

Match These Terms with Their Definitions