If a debt issue is callable,the call price is ____ par.
A)greater than
B)less than
C)equal to
D)unrelated to
E)It varies widely based on the risk of the firm.

Question

Quizplus · Accepted Answer

When a debt issue is callable, it means that the issuer has the option to redeem the bonds before maturity at a certain price, called the call price. Typically, the call price is set above par value to compensate bondholders for the early redemption. Therefore, the call price is greater than par.

If a Debt Issue Is Callable,the Call Price Is ____