(a) Under which bond provision is the issuer required to retire portions of the bond issue prior to maturity? Define this provision and explain how it alters riskiness of the bond.

(b) Under which provision does the issuer have an option to retire the bond prior to maturity? Define this provision and explain how it influences riskiness of the bond.

(c) In (b), what are the three types of this feature that can be attached to the bond? Define each of type and discuss to what extent does each type influence riskiness of the bond.

Answer rating: 100% (QA)

Some treasury securities carry call provision that allow the bonds to be retired pri... View the full answer