Question $4$

$6pts$

What does the call feature of a bond mean?

An investor can call for payment on demand.

An investor can only call if the firm defaults on an interest payment.

The issuer can call the bond issue prior to the maturity date.

The issuer can call the issue during the first three years.

Question $5$

$6pts$

A fallen angel bond is best described as a bond issued:

Below investment grade.

At an original$-$issue discount.

As investment grade, but it has declined to speculative grade.