Please help me with the following question, there is only one option that is correct. Please also explain why is the option correct and other options are wrong.

QUESTION 2 In nancial markets, call option is something that provides an investor (long position) with a right to purchase the specified asset at the specified price (called strike price or exercise price). For example, if there is a call option on financial assetAthat matures in 1 year at strike price of X, investors who take long positions on this call option will be able to purchase Aat or before the maturity by paying X. Thus, if the spot price (market price) ofA becomes higher than X when the call option is exerecised, the difference will be the profit for the long positions (loss for the short positions). If it is not optimal to exercise an option, it does not have to be exercised. Meanwhile, Caliabie Bond is a type of bonds that provides call options to the issuer of the underlying bond. Issuance of such bonds would mean issuing typical underlying bonds plus call option on the underlying bonds. Thus, investors of callable bonds would take long positions on the underlying bond and short positions on the call option of the underlying bond. Before the maturity, the issuer may exercise the call option and return the prespeicied amount to the investors. Today, there are two bonds (Bond A and Bond B) in the market. Bond A and Bond B are 2.85% semiannual coupon bonds that matures in 10 years. The underlying risks (risk of the issuer) in the two bonds are the same except that Bond B is a callable bond. Which of the following statement(s) is CORRECT according to the above? i. BidAsk spread of Bond A should higher than that of Bond B. ii. When the market interest rate(s) is likely to go down, investors of Bond B will face higher level of reinvestment risk. iii. All else being equal (e.g. reinvestment rate), the return on Bond A will be higher when the market interest rate(s) go down. 0 ii 0 land iii 0 ii and iii 0 i, ii and