Question

A call provision gives bondholders the right to demand, or "call for," repayment of a bond. Typically, companies call bonds if interest rates rise and do not call them if interest rates decline. a. True

Answer 1

Answer:

False

Explanation:

A call provision entitles the issuer of the bond the right to call or demand repayment of the bond. Bondholders do not have the right to call the bond. If bondholders do not want to hold the bond anymore they can just sell it on the secondary bond market.