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anymous anymous
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2 years ago
The call feature makes a bond riskier because

▸ the issuer may not have sufficient cash to redeem the bonds at the call date.

▸ investors who ignore the call will not be paid the bond's principal.

▸ after the bond is called, the investor will need to find a new place to invest, probably at a lower rate.

▸ the issuer may decided not to call the bond and it will have to be held to maturity or sold in the secondary market.
Textbook 
Fundamentals of Investing

Fundamentals of Investing


Edition: 14th
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CrazyW27CrazyW27
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2 years ago
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