Question: Bullet point answer is fine for easier memorization. b) Why are many bonds callable? What is the disadvantage to the investor of a callable bond?

Bullet point answer is fine for easier memorization. b) Why are

Bullet point answer is fine for easier memorization.

b) Why are many bonds callable? What is the disadvantage to the investor of a callable bond? What does the investor receive in exchange for a bond being callable? How are bond valuation calculations affected if bonds are callable? [18 marks]

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