Economics · Financial Instruments
What does a 'Callable' provision imply when attached to a bond or preferred share issue?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The dividend or interest rate fluctuates based on central bank policy rates.
- 2The financial instrument automatically converts into common equity upon maturity.
- 3The issuer has the right to redeem the security before its official maturity date.✓
- 4The investor can demand early repayment from the issuer at any time.
Correct answer
The issuer has the right to redeem the security before its official maturity date.
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