Callable bonds

A) are called when interest rates decline appreciably.
B) have a call price that declines as time passes.
C) are called when interest rates increase appreciably.
D) are more likely to be called when interest rates decline and have a call price that declines as time passes.
E) have a call price that declines as time passes and are called when interest rates increase appreciably.

Callable Bonds

A type of bond that can be redeemed by the issuer before its maturity date at a predetermined price.

Call Price

The price at which a bond or a preferred stock can be redeemed by the issuer before its maturity date.

Interest Rates

The price of borrowing money, expressed as a percentage of the amount borrowed, set by lenders as compensation for the risk and the opportunity cost of lending.