If interest rates fall, a callable bond at par has the potential for large increases in price.

Name: If interest rates fall, a callable bond at par has the potential for large increases in price.
Brand: Quizplus
Rating: 4.9 (36 reviews)

Question

Quizplus · Accepted Answer

Callable bonds allow the issuer to redeem the bond before its maturity date, typically when interest rates fall. This limits the bond's potential price increase, as the issuer is likely to call the bond to refinance at lower rates.

If Interest Rates Fall, a Callable Bond at Par Has