Bonds with the callable feature sell at lower prices than bonds without such a feature.

Name: Bonds with the callable feature sell at lower prices than bonds without such a feature.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Bonds with the callable feature have the option of being redeemed or called back by the issuer before the maturity date, which is a disadvantage for the bondholder. Therefore, to compensate for this risk, callable bonds sell at a lower price than non-callable bonds.

Bonds with the Callable Feature Sell at Lower Prices Than