enables the bondholder to request early redemption of the bond before maturity.Question 10Select one:a.Callable bondb.Extendable bondc.Puttable bondd.Convertible bond
Question
enables the bondholder to request early redemption of the bond before maturity.Question 10Select one:a.Callable bondb.Extendable bondc.Puttable bondd.Convertible bond
Solution
The correct answer is c. Puttable bond. A puttable bond allows the bondholder to force the issuer to repurchase the security before maturity. This is beneficial to the bondholder when interest rates rise, as they can then reinvest the returned principal at the higher prevailing rates.
Similar Questions
Which term describes a bond with no maturity date? A. Perpetual bond B. Zero-coupon bond C. Callable bond D. Convertible bond
Which of the following describes a callable bond?Group of answer choicesConvertible to common stock at the option of the bondholderCan be called for early retirement at the option of the issuerConvertible to common stock at the option of the issuerCan be called for early retirement at the option of the bondholder
Non-Convertible Bonds: What Are They?a.Before the bonds' maturity date, the issuer may redeem or settle them.b.the worth of the Company's assets or the value of the assets being sold, as determined without taking into account any liabilities connected to such assets.c.The issuer is not permitted to redeem the financial security early without paying a penalty.d.Fixed-income securities are typically offered as a public offering by well-regarded corporations to build up long-term capital gains.
Fill in the Blank QuestionFill in the blank question.A call feature allows the corporation to buy outstanding bonds from current bondholders the date.
Notes are: A. Financial promises with a maturity of less than one year B. Long-term debt securities C. Ownership stakes in a company D. Convertible securities
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