Question

A call provision in a bond...A. Limits the actions of the borrower.B. Protects the borrower from unscrupulous practices by the lender.C. Allows the issuer to repurchase the bonds on the open market prior to maturity.D. Grants the issuer the option to repurchase the bonds prior to maturity at a pre-specified price.

Answer 1

Answer:

D. Grants the issuer the option to repurchase the bonds prior to maturity at a pre-specified price.

Explanation:

Call provision -

It is a condition given on the contract for the bond or any fixed - income instruments , which enable the issuer to again purchase the bond at some previously decided price amount , is known as a call provision .

Hence , from the given statements , the correct statement regarding call provision is option ( D. ) .