When a bond is called, the bondholder generally faces a rate of return that is lower than expected.

Name: When a bond is called, the bondholder generally faces a rate of return that is lower than expected.
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When a bond is called, the bondholder generally receives the face value of the bond plus any accrued interest, which may not be as high as the expected return if interest rates have decreased since the bond was issued. Therefore, the rate of return is lower than expected.

When a Bond Is Called, the Bondholder Generally Faces a Rate