21.

In a bond, what does a call provision do:

		Allows the buyer of the bond to require the issuer to buy the bond back at a predetermined price.
		Gives the issuer of the bond the right to buy the bond back from the buyer of the bond at a predetermined price and date that is before the final maturity.
		Gives the issuer the right to change the interest rate on the bond.
		Gives the issuer the right to call the buyer of the bond and ask if they are happy.

22. Assume you own a bond with a fixed coupon. If the prevailing interest rate in the market for a security of similar riskiness to your bond goes down the price of your bond will go down. True or False.

True

False

23. A bond will be more likely to be called by the issuer if the market interest rate is lower than the bond's coupon rate and the bond is trading at a premium. True or False.

True

False